After three days of celebrating dovish central banks, the indices and the majority of stocks took a rest to finish the week.
Precious metals continued to run on the weak dollar and oil was higher on concerns about a growing conflict with Iran but there was some profit-taking after a solid 2% move for the indices.
Friday was options expiry, which added some volume but we also had the rebalancing of the S&P indices at the close. The S&P 500, S&P 400 and S&P 600 all had adjustments. An example is Tufin Software Technologies (TUFN) , which was a recent IPO and is being added to various indices. The stock had a block of 53,000 shares cross at $27.94 near the close.
There are quite a few other examples of this type of action but next week we will see even bigger blocks cross, when on Friday, June 28, the Russell indices are reconstituted. This is often the highest volume day of the year. There will likely be some unusual moves, particularly in small-caps, as brokers prepare for the closing of the trades at the close on Friday.
The index rebalancing adds a little extra excitement but overall this is a market in a solid uptrend that is doing what it needs to do to continue to trend higher. The big move this week was kicked off after a four-day consolidation and the indices are not terribly extended at this point.
Next week we will be hearing more rumors about a China trade deal and market players will be watching economic data to see if there may be something that could push the Fed to act before its next meeting. The odds of a 0.5% cut in July are increasing and that is going to give the indices some support.
I'm looking forward to some stock-picking next week but keep in mind the Russell rebalancing is going to create some random movement.
Have a great weekend. I'll see you on Monday.