The Dow Jones Industrial Average is positioned to have the best month of June in roughly 80 years. A dovish U.S. Federal Reserve has reinvigorated traders after a volatile May. Fed chairman Jerome Powell has swung the door wide open for a rate cut, with some traders betting on a downward move next month.
JPMorgan Chase (NYSE:JPM) fell 0.35% week-over-week as of close on June 21. The stock has dropped 2% over the past month. In late May JPMorgan predicted two 2019 rate cuts after the US tariff threat on Mexico.
The Trump administration eventually rescinded its threat after Mexico complied with U.S. demands on the border, but the rate cut has not been shelved.
Bank of America (NYSE:BAC) stock rose 0.29% over the past week. Shares are also down 2% from the previous month. Both banks are set to release second quarter 2019 results in July. Consumer spending and the labour market has been strong in the United States, but there are growing concerns over industrial output and slowing growth.
A low-rate environment may work to underpin the stock market in the second half of 2019. JPMorgan and Bank of America both posted record quarterly profit in Q1 2019. Banks expected the benefits of U.S. tax reform to wear off in 2019, but the first quarter demonstrated that it can still fuel earnings growth. I like both stocks as we move into July.
