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Sunday Coffee with Eirik: Market Recap 6/5-6/9

The week started off slowly, with modest losses on Monday and Tuesday, as investors and traders were awaiting former FBI director James Comeys testimony. Prepared remarks from Mr. Comey were released to the public on Wednesday and became the focal point of Wednesday’s trading session. The initial response to the statement was positive, as market participants were seemingly heartened by the understanding that there was not any apparent obstruction of justice claim against President Trump.

On Thursday, the Senate Intelligence Committee asked Comey if he thought mister Trump was trying to obstruct justice in relation to the Michael Flynn case. Mr. Comey responded that it was not up to him to say and that he would let others make that determination.

Investors and traders seemed relieved by Comey’s testimonial as well as the EBC’s decision to leave interest rate unchanged.

“The Comey testimony provides ammunition for both parties, but the so-called ‘smoking gun’ is absent,” said Quincy Krosby, chief market strategist at Prudential Financial. “For the next 12-18 months investors will factor in headline leaks from political insiders and try to interpret any signals from the Mueller investigation. However, what investors want above all else, is to have the president’s agenda translated into action, viable action.”

The Brits threw the world for a loop again as Prime Minister Theresa May’s Conservative party lost its parliamentary majority. The pound dropped noticeably following the results.

Stocks hit fresh record highs once again on Thursday and Friday, before a sell off in tech stocks dragged the S&P 500 and Nasdaq lower. Mega-Cap names like Apple ($AAPL), Microsoft ($MSFT), Amazon ($AMZN), Alphabet ($GOOGL), and Facebook ($FB), and semiconductor stocks, like NVIDIA ($NVDA), came under some notable profit-taking pressure.The top-weighted technology sector, which houses five of the six aforementioned companies, plunged 2.7% on Friday.

“There’s a rotation from tech into different sectors,” said Dave Lutz, the head of ETF trading at JonesTrading, noting financials and energy, two of this year’s laggards, are outperforming Friday.

That is it for this week’s recap, see you on SprinkleBit!

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