Major U.S. indexes advanced, both the Russell 2000 and Nasdaq posted new record highs after upbeat data on the services sector followed better than expected employment and manufacturing. Overseas, performance was more of a mixed bag as European indexes finished mostly lower with figures released on the Eurozone services sector showing the rate of expansion hit an 18 month low in May, continuing the recent string of disappointing data in the region. Headlines also suggesting the European Central Bank (ECB) could begin discussions about the timetable for ending its bond purchase program when it meets this week. Asian markets fared better with most indexes in the region ending the week in the positive territory led by Japan’s Nikkei 225 Index.
President Trump has damaged the U.S. relationship with its closest allies, the other six countries attending the G7 Summit over the weekend in Quebec are prepared to issue a statement denouncing Washington’s policies. Trade tariffs, among other issues, have isolated President Trump, although he doesn’t seem to mind. There is little sign of a solution to the trade tensions.
Oil prices were mixed, dipping on expectations of more supply from OPEC and Russia, but rebounding on news of deeper troubles in Venezuela. Trading will likely be range bound over the next two weeks until the market gets some clarity from the Vienna meeting.
This week, traders will focus on statements after the G7 summit in Quebec over the weekend. The U.S.-North Korea Summit meeting will take place on Tuesday. Monetary policy meetings will be held by the Bank of Japan, ECB and Federal Reserve where expectations for a rate hike by the Fed are near 100%.
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