S&P 500 Enjoying its Best June Since 1955
June 2019 may not have been the smoothest for the stock market but it is at least on track to end things on a high note. As CNN Business notes, the S&P 500 is likely to see its best June in more than six decades. This comes after weeks of rises and falls that hinged on matters of trade, interest rates, and more.
Currently the S&P 500’s gains for this month amount to 6.3%. Assuming that holds for this final trading day of the month, it would be the index’s best June since way back in 1955 when it grew 8.23%. Perhaps more importantly, this month has been the S&P’s best since January and set a new closing high on June 20th.
Elsewhere the Dow Jones Industrial Average also saw its strongest month since January despite not reaching a new high like the S&P did. Nevertheless its 6.9% gain for June puts it up 14% for the year so far. Looking to other indices, the Nasdaq Composite matched the Dow’s 6.9% gain for June but is actually up 20% in 2019.
It may seem like ancient history now thanks to the breakneck speed of the news cycles but this past month didn’t always look so rosy for the markets. Early on in June, things dipped as President Trump threatened to install a series of tariffs on imports from Mexico, with the first round taking effect June 10th. News that those plans were scrapped sent to market soaring despite a relatively weak jobs report being released the same day.
Another factor that’s likely boosting the market is the expectation that the Federal Reserve will cut interest rates in the near future. The Fed declined to take such measures at their latest meeting but Chairman Jerome Powell has signaled that he’s now open to cutting rates moving forward. In fact the CME FedWatch Tool now pegs the likelihood of a July rate cut at 100% — including a 30% chance rates will be lowered by half a point.
Even in the absence of a new trade deal with China or any official rate cut news, it’s clear that the bulls ultimately won in June. Plus, with Chinese President Xi Jinping and President Trump expected to discuss trade at this weekend’s G20 summit in Japan and the strong possibility of a Fed rate cut on the horizon, it would seem that the markets are poised for a strong July as well. That said, nothing is a sure bet these days so we’ll have to see if the month ahead will be another roller coaster.