By Chris Matthews and Mark DeCambre, MarketWatch
All eyes on G-20 meeting
Stocks closed higher on Friday, led by banks after the Federal
Reserve's second round of stress test results late Thursday, but
investors remain focused on the planned meeting on trade issues
between President Donald Trump and Chinese President Xi Jinping at
the G-20 meeting in Japan Friday night New York time.
Friday also marks a rebalancing of the FTSE Russell index
(http://www.marketwatch.com/story/russell-rebalance-large-us-companies-are-getting-bigger-while-the-small-wither-away-2019-06-27),
of mostly small capitalization stocks, which will occur at the
close of trade.
J.P. Morgan Chase (JPM), Morgan Stanley (MS), Citigroup (C) and
Wells Fargo (WFC) all rose. All 18 banks past the Federal Reserve
stress tests, including Deutsche Bank AG (DBK.XE) which had earlier
failed, and many of the largest lenders in the U.S. announced
increased payouts to shareholders in the wake of the results.
The total payouts to bank shareholders from dividends and
buybacks will hit $173 billion, a record high amount for the group.
Goldman (GS) raised its dividend by nearly 50%.
But Wall Street's gains were restrained as investors awaited the
Trump-Xi trade meeting scheduled for Saturday Japan time. The
Chinese Ministry of Commerce has called on Washington to cancel its
import tariffs and sanctions measures on Huawei and other Chinese
companies, while Trump has reiterated a threat to impose tariffs on
the remaining $300 billion of Chinese imports if talks fail.
"There's a lot of uncertainty as to what the meeting, due to
place on Saturday (02.30 GMT), will produce, but the minimum
outcome that traders are anticipating is for the two sides to
restart the stalled trade negotiations and delay imposing any
additional tariffs," wrote Raffi Boyadjian, senior investment
analyst at brokerage XM, in a daily research note. .
How are the major benchmarks faring?
On the final trading day of the month and quarter, the Dow is up
about 6% for the month and 14% for the year to date, while the
S&P 500 is up 6.5% for the month, and 17% for the year.
June's gains came after the Fed opened the door for easier
monetary policy later this year. The Fed said earlier this month it
will "act as appropriate" to maintain the current economic
expansion. This lifted market expectations for a July rate cut.
In U.S. economic data Friday, the Commerce Department reported
(http://www.marketwatch.com/story/consumers-boost-spending-in-may-as-incomes-rise-and-inflation-stays-low-2019-06-28)
U.S. consumer spending rose 0.4% in May, while personal incomes
rose 0.5% during the same period. Economists polled by MarketWatch
had expected gains of 0.3% and 0.5%, respectively.
The Federal Reserve's most closely watched measure of inflation,
the PCE index, showed yearly inflation falling from 1.6% in April
to 1.5% in May, potentially supporting the argument for the Fed to
lower interest rates in the coming months, as it attempts to bring
inflation to its 2% annual goal.
The University of Michigan released its final reading of
consumer confidence for the month of June, with its index coming in
at 98.2, above the 98 expected by economists polled by MarketWatch,
though off the 100 level seen in May, which was the highest reading
in eight months.
Read:The Dow is now on pace for its best June return in 80 years
(http://www.marketwatch.com/story/the-dow-is-now-on-pace-for-its-best-june-return-in-80-years-but-the-fed-could-change-that-in-a-heartbeat-2019-06-18)
Read: G-20 preview: Facing faltering economies, Trump and Xi
likely to agree to a cease-fire of trade war
(http://www.marketwatch.com/story/g-20-preview-facing-faltering-economies-trump-and-xi-likely-to-agree-to-a-cease-fire-of-trade-war-2019-06-26)
Check out:Trump pushes allies on trade, says his talk with Putin
at G-20 'is none of your business'
(http://www.marketwatch.com/story/trump-says-hell-talk-to-putin-at-g-20-but-what-they-say-is-none-of-your-business-2019-06-27)
Which stocks are in focus?
Apple Inc.'s stock (AAPL) closed steady after design legend Jony
Ive said he was leaving
(http://www.marketwatch.com/story/legendary-designer-jony-ive-to-leave-apple-after-27-years-2019-06-27)the
iPhone maker to start his own venture.
Boeing Co. shares (BA) ended little changed after losing 2.9%
Thursday on news that the company's 737 MAX fleet, which has been
grounded since March after two fatal crashes, could take much
longer to receive regulatory clearance to bring the jets back
online.
Fellow Dow constituent, UnitedHealth Group Inc. (UNH) said
Friday
(http://www.marketwatch.com/story/unitedhealth-names-optum-coo-dirk-mcmahon-as-new-ceo-2019-06-28-791242)
that it named Dirk McMahon, currently president and chief operating
officer of its Optum platform as its new chief executive.
How are other markets trading?
The 10-year Treasury note yield , fell from Thursday's close to
1.998%. For the quarter, yields on 10-year paper notched their
largest quarterly decline since March 2016, according to Dow Jones
Market data.
In commodities markets, August West Texas Intermediate crude
settled at $58.47 a barrel. Month to date, prices climbed 9.3%,
according to Dow Jones Market Data.
August gold rose to settle at $1,413.70 an ounce after seeing a
six year high at $1,418.70 for a most active contract on
Tuesday.
(END) Dow Jones Newswires
June 28, 2019 16:24 ET (20:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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