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After The Close - Stocks advanced nicely this morning, softened around noon, but still managed to put in a constructive session. Traders seemed pleased that the United States has decided not to impose tariffs on Mexico at this time. Of note, relations between the United States and China have become quite strained, and investors did not likely want to see problems developing with other key trading partners. At the close of the session, the Dow Jones Industrial Average was ahead about 79 points; the broader S&P 500 Index was up 13 points; and the NASDAQ was higher by 81 points. Market breadth was positive, as advancers outpaced decliners on the NYSE. From a sector perspective, the technology and financial issues logged impressive gains, while the defensive utility names lagged the broader market.

Meanwhile, there were no major economic reports released today. However, on Tuesday, the Producer Price Index (PPI) for the month of May is due out. On Wednesday, the monthly Consumer Price Index (CPI) will follow. Most traders expect that inflation will remain relatively tame, as has been the case for some time.

Elsewhere, in the corporate arena, there has been some M&A news worth mentioning. Specifically, Raytheon (RTN) has agreed to merge with United Technologies (UTX - Free United Technologies Stock Report), creating one of the largest defense-related companies. The move likely makes sense, as there has been quite a bit of consolidation taking place in this area lately. Meanwhile, Salesforce.com (CRM) has agreed to buy Tableau Software (DATA), a data analytics firm, in an all-stock transaction valued at over $15 billion. Shares of Tableau traded sharply higher on the news today.

Technically, stocks seem to be doing a bit better, as we move into the month of June. Today’s buying effort pushes the broader S&P 500 Index above its 50-day moving average, located at the 2,870 level. However, it remains to be seen if the bulls can produce a sustained rally from these levels. – Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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Before The Bell - The first full trading week of June was just what the doctor ordered for the ailing bulls, who were coming off the second-worst May for stocks since the 1960s. Last month, trading was hurt by ongoing worries about the international trade disputes and slowing global growth. However, stocks reversed course last week after the Federal Reserve said it would not be against cutting interest rates later this year, now possibly as early as next month or in September to boost growth that has taken a hit from the ongoing trade wars.

The recent dovish stance from Federal Reserve leaders and lackluster jobs creation figures for May—nonfarm payrolls rose by an unimposing 75,000 positions last month—now has investors thinking that the central bank will loosen the monetary reins sooner rather than later. Equities have historically done well during periods of accommodative practices by the Fed and last week was no exception. As noted equities rallied sharply over the final four days of the trading week, including respective gains for the Dow 30, NASDAQ, and S&P 500 Index of 263, 127, and 30 points on Friday. Overall, the buying was broad-based, with advancing issues leading decliners by a considerable margin on both the Big Board and the NASDAQ, and all of the major equity groups finished in positive territory. The leadership was provided by the technology and consumer discretionary sectors. For the five day stretch, the aforementioned major indexes rallied 4.7%, 3.9%, and 4.4%, respectively.

Meantime, the bulls are looking to pick up where they left off last week. The future are indicating that the market will open the new trading week to the upside. Pushing equities higher in pre-market action was news over the weekend on trade with Mexico and China. On the former front, the investment community is showing some signs of relief that U.S. tariffs against Mexico won't go into effect today. President Trump said late Friday that the two countries had reached a deal to curb illegal migration into America. There were rampant fears that tariffs against Mexico and retaliatory measures would hurt the U.S. economy. Hence, the relief rally we are likely to see this morning. Likewise, investors are hoping to see some progress in the trade talks with China. On point, Treasury Secretary Steven Mnuchin met with People's Bank of China chief, Yi Gang yesterday, with a "candid discussion on trade issues." It was the first high-level meeting between U.S. and China leaders since the Trump Administration hiked tariffs on $200 billion worth of Chinese goods from 10% to 25% early last month.

The new trading week will also start with some M&A news, which is typically viewed as a sign of a healthy stock market. Specifically, industrial conglomerate United Technologies (UTXFree United Technologies Stock Report) and defense giant Raytheon (RTN) have agreed to combined forces. The deal is viewed as a merger of equals, and United Technologies still plans to spin off its Otis elevator and Carrier cooling-and-heating systems units into separate companies. The United Technologies-Raytheon deal will occur after the spinoffs.

Lastly, investors should note that we will get a few important reports from the business beat, including a few that will be closely monitored by the Federal Reserve. This week will bring data on producer and consumer prices, retail sales, and industrial production and capacity utilization. – William G. Ferguson

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.