Equities were spooked by a resurgence in new virus infections, a rise that has slowed the reopening in several states. The markets were also frightened by the Federal Reserve dictum of banning bank stock buybacks through September and capping dividends around current levels.

The markets ignored data indicating the recovery in consumption got off to a solid start as many businesses reopened. Specifically, consumer spending surged a record 8.2% in May after falling the most on record in April. Spending however is below pre-pandemic levels.

Incomes declined 4.2%, just short of a record decrease after posting the largest ever increase in April that was driven mostly by household relief payments of $1,200 refundable tax credits. Economists had expected a 6% drop in May.

Wages and salaries rose 2.7% in May from the prior month, the largest increase since 1993, reflecting modest rehiring as businesses reopened. That followed a record 7.6% drop in April.

Cooper, a traditional economic indicator rose for the sixth consecutive weekly advance. Gold also traded higher and crude was nominally lower.

Most will agree government will or cannot again shutter the economy. Perhaps the most significant question at hand is whether there will be an increase in hospitalizations and ICU admissions.

What will happen this holiday shortened week? The economic data is crowded with top tier data including both ISMs, confidence data, FOMC Minutes, and employment statistics.

Last night the foreign markets were mixed. London was up 0.48%, Paris up 0.26% and Frankfurt up 0.49%. China was down 0.61%, Japan down 2.30% and Hang Sang down 1.01%.

The Dow should open flat as the markets are weighing additional stimulus against the acceleration spread of the virus. The 10-year is unchanged at 0.65%.


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