1. Moving the Markets
Stocks spent much of the day in the red as Wall Street reacted to sub-par economic data out of China. China’s official purchasing manager’s index for manufacturing was inline with forecasts at 50.1, but that is a dangerous place to be because any number below 50 indicates a contacting economy.
The month of May is best known for the saying, “Sell in May and go away.” That old saying was smudged as stocks gained solidly to round out the month despite the seasonal headwinds that typically accompany May. Of course, this feat was only accomplished with the help of the Fed, who managed interest rate hike speculations well enough to keep the major indexes in the green.
June also usually entails bearish sentiment, mostly due to its poor performance history. Economic data points today were downright dismal with automakers having the second highest inventory in 23 years as GM sales plunged 18%, while sales of Ford and Lincoln passenger cars dropped an amazing 25 percent, which was led by a 37 percent slide for the Taurus sedan.
Let’s keep an eye on commodities and Fed minutes as the month unfolds, as markets remain very reactionary to these two indicators. And, of course, the all important Brexit later on when British voters head to the booths to determine whether Great Britain will stay in the Eurozone or not. If not, expect some fireworks affecting not only Europe stocks but U.S. equities as well. In that scenario, June gloom might be looming.
It looks like the SEC is finally ready to put a stop to accounting shenanigans.
REX Shares, the fairly new entrant in the exchange-traded funds space promoted by industry veteran Greg King, recently launched two products that focus on volatility of the broad-based large-cap US equity market.