| Friday's Headlines 1. US markets struggle to recover from Thursday's plunge 2. This week's sector winners and losers 3. S&P 500 holds 200-day support ... barely 4. What to expect next week Markets Closed
Year-to-Date
 Image courtesy PetrBonek/Getty [NOTE: James is guest writing the market sum today, as Caleb is taking a day off.] Markets Today The past week was very much unlike the preceding three weeks. Prior to Wednesday, markets were on what could be described as a frenzied rally, with stocks surging sharply to extend the record-breaking recovery from March lows.
Then Thursday came. Driven in part by fears of a resurgence in coronavirus cases throughout the U.S. and the world, as well as a rather gloomy economic forecast by the Fed, stocks plunged, cutting the high-flying S&P 500 down by nearly 6% on that day.
And then Friday came along, promising a quick rebound ... at first. Instead, a roller coaster ride ensued, pushing markets well into the red at a few points during the day before ending the day and week with a moderate rebound from the lows. In the process, the S&P 500 bounced off its 200-day moving average, a key technical event discussed in more detail below.
Aside from equities, other major assets that made major moves include gold and crude oil. The precious metal rebounded this week, partly due to its safe-haven appeal as markets tanked. Meanwhile, crude oil prices dropped after a surprisingly large build in U.S. inventories was reported.
The week ahead brings several key economic reports, but among the most market-moving events will likely be Fed Chair Jerome Powell's testimony in front of both the Senate Banking Committee and the House Financial Services Committee. These events could help determine whether markets resume their recovery or continue to retreat. [NEW READER SURVEY: As promised, we are running another two-week survey of our U.S.-based readers to gauge your sentiment and see what moves, if any, you have been making with your money given the market recovery. We'll share the results, as always, and we thank you for your time and participation.]
Headlines:
 This Week's Sector Winners and Losers There were no real sector winners this past week, as all 11 S&P 500 sectors were in the red for the week as of the market close on Friday. This was due, in large part, to the massive drop in the major indexes on Thursday. That said, there were a few relative winners that held up better than most others, along with big losing sectors that dragged down the markets, as shown on the chart above.
This week, the technology sector was the clear "winner," having dropped by just around 2%, withstanding the worst of the market sell-off late in the week. Big tech names (including Microsoft and Apple) weathered the storm better than most, and many of those tech stocks are only slightly off their new highs. The communications services sector came in a close second at around -2.5% for the week. Helping to keep the sector afloat were the likes of communications behemoths, Facebook and Alphabet.
On the other end of the spectrum, the biggest losers this past week were clearly energy and financials. Crude oil prices dropped sharply once again this past week, due in large part to a surprisingly large build in U.S. crude oil inventories as well as fears that a potential resurgence in coronavirus cases would further pressure energy demand. As a result, energy companies took the brunt of the market drop this week, with the sector dropping around 11%. Financials also took a big hit as banks and financial services were battered once again by gloomy economic assessments and a long-term forecast of near-zero interest rates from the Fed.
This exercise in identifying relative strength, which pits companies in the same industry or sectors in the same index against one another, can be a useful tool in uncovering potential trading and investing opportunities.  S&P 500 Holds 200-Day Support ... Barely The 200-day moving average (MA) is probably the best-known longer-term moving average used by traders and investors. Typically applied on a daily chart, the 200-day MA excels at depicting the long-term trend of a market, stock, or index. Equally important is its role as an indicator of key support and resistance levels.
As shown on the chart above, the S&P 500 (SPX) just revisited its 200-day moving average to the downside on Thursday's market plunge and then again on Friday. This is after the S&P 500 rose back above its 200-day MA in late May.
Technical analysts would typically say that if price is trading above this key moving average, it can generally be considered in a bullish trend. And if a market is trading below the average, it could be considered in a bearish trend. As markets have rebounded and recovered so dramatically in the past few months from the pandemic-driven collapse, the S&P 500 has technically been in an uptrend for around the past two weeks.
On Thursday and Friday of this week, though, the index has come dangerously close to breaching its 200-day moving average to the downside once again. The moving average barely held as support this week. The week ahead should show us whether the market crosses this critical threshold to the downside and becomes technically bearish again, or if there is a bounce that puts U.S. stocks on track for a further recovery. What to Expect Next Week Here's a look at asset class returns year-to-date:  Economic Events This Week
Monday, June 15:
Tuesday, June 16:
Wednesday, June 17:
Thursday, June 18:
Friday, June 19:
U.S., U.K., and Canadian Retail Sales All three of these countries report retail sales in the upcoming week, and it will be one of the best indicators of their economic strength. Consumer spending makes up nearly 60% of GDP in Canada, nearly two-thirds in the U.K., and almost 70% in the U.S., meaning that the retail doldrums we've seen due to COVID-19 have hit hard. As the three countries look to possibly re-open this month, the May numbers could represent the low-point of retail sales or, as with U.S. unemployment numbers, the beginning of the recovery. If U.S. retail sales show strength, that would add a second data point, in addition to May's stronger-than-expected U.S. employment numbers, to indicate a recovery.
Chinese Industrial Production When China reports May industrial production on Sunday, June 14, it will be one of the biggest indicators of its economic health. China has managed to very successfully keep the spread of the virus under control within its borders. Despite being the most populous country on earth, it is not in the top 10 countries by number of infections or deaths. However, even if it can reopen its factories, it is unclear if there will be enough demand for them to supply. With the virus shutting down economies throughout the world, tanking demand for goods of all sorts, Chinese industrial production will be a helpful bellwether for both the recovery of Chinese production capacity and world demand for goods.
Amazon Tax City budgets across the U.S. have been put under tremendous pressure by the COVID-19 pandemic. To help with this squeeze, the Seattle City Council is currently considering a tax on employers with payrolls over $7 million, nicknamed "the Amazon Tax." If this tax is passed, many other cities may follow suit. This may cause companies to move, or it may cause many city and state governments to reassess the substantial subsidies they offer corporations to locate in their cities. Either way, it may represent a change in the relationship cities have with the corporate headquarters within their borders, so keep on eye on Seattle.
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(chart courtesy YCHARTS)  Shares of American Airlines are up by 15.5% after forecasting zero cash burn by the end of the year. Other airline stocks, such as United (18.5%) and Delta (over 11%), also rose today, as did plane manufacturer Boeing (over 11%).  Shares of clothing company PVH are down by 6% following Q1 earnings results that fell short of expectations. Dollar General's stock price fell by over 2% after the variety store chain was accused of covering up cases of COVID-19 at a warehouse in Jackson, Georgia. Word of the Day The 200-day simple moving average (SMA) is considered a key indicator by traders and market analysts for determining overall long-term market trends. The indicator appears as a line on a chart and meanders higher and lower along with the longer-term price moves in the stock, commodity, or whatever instrument that is being charted. The 200-day SMA seems, at times, to serve as an uncanny support level when price is above the moving average or a resistance level when price is below it.
The big question now is whether the S&P 500 will remain supported by its 200-day moving average in the days and weeks ahead.  Image courtesy TIME Today in History June 12, 1928: After more than 130 years of trading, the New York Stock Exchange finally has its first day on which more than 5 million shares trade hands, as total daily volume hits 5,252,425 shares. Unfortunately, it is a day of noontime terror, as many stocks drop between $25 and $150 in price, evidently in response to President Calvin Coolidge's announcement that he will not run again. "Individual losses were staggering," reports The New York Times. "Hundreds of small traders were wiped out. The sales were countrywide. They flowed into the Stock Exchange not alone from New York brokerage houses but from every nook and cranny of the country." But by day's end, the market recovers, with the Dow Jones Industrial Average closing at 202.65, down only 3.09 points, or just 1.5%. New York Stock Exchange flyer, "Key Dates in the History of the New York Stock Exchange."
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Friday, June 12, 2020
The Struggle
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