June 10, 2020

Good morning,

Profit taking drove stock prices down yesterday for most of the U.S. equity market, with the Dow finishing off 300 points, or just more than 1%.  The S&P 500 followed suit, losing 25.21 points, or .78%.  The tech-heavy NASDAQ eked out a small gain, gaining just over 29 points, or .29%.

The markets await a couple of reports this morning, namely the Federal Reserve’s assessment on the current state of the economy post-coronavirus as they debate if additional stimulus is needed.  It is largely anticipated that the Fed will maintain course by keeping interest rates very low and continuing to purchase securities in the open market (adding liquidity to the economy).

Also released this morning is the May CPI (consumer price index) and May year-over-year CPI.  May core CPI was expected to be flat but was reported at -.1%.  May year-over-year was expected to be 1.3% but reported at 1.2%.  Neither measure moved the Dow futures, but does dampen the argument for either inflation or deflation.

Of note is the price of oil over the last several weeks.  During the recent “oil disaster,” the price of oil actually fell into the negative as supply skyrocketed during the depth of the virus lockdown.  Since then, oil has made its way back to the high $30s per barrel.

Have a great day.