Read the highlights of this week’s commentary from Helios:
- US industrial production increased for the second consecutive month in June, signaling a potential recovery in manufacturing. This growth includes a 0.6% rise in production at factories, mines, and utilities, building on a revised 0.9% increase in May and resulting in the largest two-month gain since late 2021.
- In June, US retail sales, excluding autos, rose by 0.4%, the most in three months. The data suggests consumers are shifting their spending toward categories where prices have dropped, and spending less on services than they did a year ago. However, a 2% drop in auto dealership sales due to a cyberattack kept overall retail sales unchanged.
- Last week, investors shifted their focus from megacap tech stocks to underperforming sectors, motivated by expectations of Federal Reserve interest rate cuts, new trade restrictions on chipmakers, and skepticism about the sustainability of the AI hype. Analysts anticipate a slowdown in profit growth for major tech companies, and traders are reallocating profits into small-cap stocks, which may benefit from lower interest rates.
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