Market Brief – Monday 6/22/20

Stocks started the week flat and were struggling to find traction while Treasury yields started the week lower. Estimates show there will be a large quarter-end selling of equities as pension funds and asset allocated portfolios sell stocks to buy bonds.

The Chicago Fed National Activity Index rose to +2.61 in May, the highest level in recorded history for the index, as April’s number was revised lower. Due to the month-to-month fluctuations in the index, the three-month moving average is -6.65 showing below-trend growth. The diffusion index also shows below-trend growth as it posted -0.43 for May.

Existing home sales fell -9.7% in May and -26.4% from this time last year. Due to the way the data is collected, there will likely be a substantial rebound in existing home sales in June. Home prices continue to rise as well as the number of second-home buyers.

Stocks closed slightly higher on the day and Treasury yields reversed their early declines to close flat on the day.