Activity Ticks Up, Competition in the Housing Market, and The Nasdaq Races Past Its Peers

The economy is showing more signs of life as the end of Q2 approaches. The Chicago Fed National Activity Index has crossed sharply into growth territory, beating expectations by a more than 12 point gap, and manufacturing activity is following a similar trajectory. Meanwhile, new home sales may have surged 16.6% in May, but existing home sales have plummeted nearly 27% year-over-year and inventories of existing homes for sale are hovering at multi-year lows. Competition among apartment-dwellers turned house-hunters looks poised to remain stiff as the pandemic wears on. And the S&P 500® Index again owes the bulk of its performance to just five companies (we’re sure the names won’t surprise you) as 495 of the 500 are still struggling at a weighted average of -8%. The Nasdaq though has been leaving the other major indices in its dust. The index just hit another record high and the gap between it and the S&P and Dow is the largest it’s been since 1983. But could a declining USD be enough to undermine its success? Turning to the international stage, the European recovery looks to still be going strong, but despite its success in managing COVID-19, Japan is struggling. Will the island nation be further battered by COVID-induced disruptions to the supply chain?