Data Points
- Money market fund assets fell by $105 billion over the last four weeks
- The Leading Economic Index for the U.S. improved 2.8% in May from the prior month
- U.S. retail sales increased a seasonally adjusted 17.7% in May
Top Three Market Headlines
Investors Begin to Lighten Up on Cash: In a sign that investors may be taking small steps towards reembracing riskier investments, the total amount of assets in money market funds has declined by $105 billion over the last four weeks, according to The Investment Company Institute (ICI), an association that represents mutual funds and ETFs globally. The four-week stretch, which left total money market fund assets at $4.68 trillion as of June 17, represents the longest streak of weekly withdrawals in more than three years, and comes after nearly a trillion dollars fled into the safety of money market funds since the start of the stock market’s turbulence in late February amid the emergence of COVID-19.
Leading Economic Indicators Rebound: The Leading Economic Index (LEI) for the U.S. increased in May for the first time in four months, rising at a rate of 2.8% over April’s level. The LEI, published monthly by The Conference Board, is intended to signal shifts in the business cycle based on readings of various economic and financial indicators. According to the latest report, four of the ten components rose in May, led largely by relative improvement in unemployment insurance claims, which accounted for about two-thirds of the gain in the index. Nonetheless, the severity of the LEI’s decline between February and April—during which it declined more than 13%—highlights the long road to recovery facing the U.S. economy.
Retail Sales Rebound in May: U.S. retail sales increased a seasonally adjusted 17.7% in May from the previous month, the largest monthly gain on record since 1992. The rebound came after significant declines for the measure, which reflects purchases at stores, restaurants, and online sites, in March and April of 8.3% and 14.7%, respectively. Even with the large improvement, retail spending in May totaled $486 billion, still far short of the pre-pandemic $527 billion total recorded in February. Retail executives attributed the boost in part to government stimulus programs, and anticipate that sustained improvement will depend on the recovery of the labor market.