Stocks finally saw some volatility, dropping sharply on Wednesday following reports President Trump may have obstructed justice by asking then FBI Director James Comey to drop his investigation of Michael Flynn’s ties to Russia. The averages suffered their worst session of the year, but the pullback was short-lived, as investors once again stepped in to “buy the dip,” recouping the majority of the mid-week losses with advances on Thursday and Friday.
MACRO NEWS: In the U.S., the Empire State manufacturing index fell to a seven-month low of -1.0 in May from 5.2 in April. The Philly Fed index rebounded 16.8 points to 38.8 in May, which was stronger than expected. The leading index rose 0.3% to 126.9 in April, setting a fresh record high going back to 1959. The NAHB homebuilder sentiment index rose 2 points to a reading of 70 in May. Housing starts fell 2.6% to a 1.17M rate in April while building permits declined 2.5% to a 1.23M rate, both of which were a bit worse than expected. Industrial production grew 1.0% in April, which was better than the 0.4% consensus forecast. 232,000 initial jobless claims were reported for the week of May 13, which was below the 240,000 that were forecast. In Brazil, the country’s stock market and currency plummeted after a Brazilian newspaper reported that there was a secret recording of Brazil’s new President Michel Temer that would implicate him in a national bribery scandal. Temer went on to say after the report that he does not plan to resign.
