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Overview: Stocks took a breather last week as investors weighed the U.S.-China trade tensions against the market’s increasing focus on the chances of a Federal Reserve rate cut. Interest rates were lower, as investors remained concerned over slowing global growth. The U.S. 10-Year Treasury yield fell 4 basis points (bps) to end at 2.09%. In Europe, German 10-year Bund yields hit a record low at -0.27%. Economic data was mixed, with May U.S. CPI coming in below expectations at 1.80% year-over-year. On the plus side, U.S. industrial production (IP) and manufacturing both beat consensus estimates.

Looking forward: Markets are now pricing in almost 3 rate cuts, or 75 bps, by the end of 2019. This week the Fed will meet Tuesday and Wednesday, with any rate decision announced on June 19. The G20 (Group of 20) summit will take place late next week in Japan. President Trump has indicated he will wait until after this month’s G20 meeting to decide on extending tariffs, and U.S. and Chinese officials are expected to meet during this meeting to discuss the terms on which to restart trade discussions.

This communication is for informational purposes only. It is not intended as investment advice or an offer or solicitation for the purchase or sale of any financial instrument.

Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results. 8659156