And I am not just referring to the hot summer temperatures across the country. Stocks were on fire on Friday capping off the best June for the key indices in over a decade. For the month, the Dow Jones Industrial Average (chart) finished up almost 4%, the Nasdaq (chart) +3.81%, the S&P 500 (chart) +3.96% and the leading small cap index Russell 2000 (chart) gained almost 5% on the month.
Equities got a huge boost on Friday after the European Union agreed that the rescue funds that have been established could be used for their bond markets without compliance to established budgets rules which would increase austerity measures. This caught investors off guard for no one expected such a drastic measure from the EU considering how historically slow their governments have acted during this crises. There now is a level of confidence globally that the EU is finally getting how serious the situation is, and seemingly are prepared to take meaningful action.
Back here at home, the second quarter is over and the markets’ attention will be shifting to corporate earnings reporting season this month. The good news here for stocks is that expectations are very low for Q2 earnings, so if companies are able to demonstrate any signs of growth, this alone could lift markets to new 52 week highs?
Next week is a shortened trading week due to Independence Day. Equity markets close early on Tuesday, and on the fourth of July, both bond and equity markets are closed for the day.
Have a great week and Happy 4th of July 🙂