The OPEC meeting in Vienna this week comes in the midst of an oil price
increase. Friday’s release of the U.S. employment numbers for May will
be closely watched to see if they are in line with earlier positive
data. If so, the likelihood of a Fed rate increase in June goes up
considerably, which could lead to more dollar appreciation.
The long Memorial Day weekend is fast approaching, and with it the
unofficial start of summer and a typically slower pace — for a few
months — on Wall Street. This seasonality creates an opportune time to
take stock of the markets in what has so far been an exciting 2016 —
that is, if your definition of “exciting” is wild, sometimes
inexplicable swings in asset prices.
The good news in the municipal bond market: There is strong investor
demand, which is bidding up prices. Not only is the domestic desire for
munis running hot, the presence of negative interest rates in developed
Europe and Asia has escalated the amount of money flowing in from
overseas banks, pension funds and other institutions.
While U.S. stocks managed to eke out a small positive in the first
quarter of 2016, bottom-line growth for the same period is coming in
negative. It’s the fourth-straight quarter of negative earnings growth
for the Standard & Poor’s 500. The last losing streak this long came
during the depths of the financial crisis/Great Recession.