These Trump-driven stocks could be your worst bet for June

As stocks kick off the summer, there’s a plea out there for some action — even some gloom.

“We open the page on the month of June, and I, for one, hope we can break this malaise in markets, with either an upside break or at least a reasonable pullback in global equities to attract new money and fresh life into the markets,” says IG’s Chris Weston.

A small selloff would be “nice,” Daniel Morris, senior investment strategist at BNP, told Bloomberg. He says it’s just tough to find stock bargains, given the market has them priced to perfection.

That brings us to our call of the day, which says if you’re plotting out a June strategy, then avoid financials like the plague. That lack of action in markets has been especially hard on banks, whose ability to generate fees falls when markets aren’t coughing up excitement.

The Financial Select Sector SPDR Fund XLF, +0.35%  has, on average, lost 3.4% in June over the past 10 years, according to Rocky White, senior quantitative analyst at Schaeffer’s Investment Research. It has been positive just 20% of the month over that time.

Schaeffer’s Investment Research

Financial stocks were initially a big beneficiary of the so-called Trump trade, but have lost steam as his economic-stimulus plans look like they may not get pushed through easily. It was Bank of America BAC, +0.33% and JPM JPM, +0.26% who hinted at a slump in trading in the second quarter.

According to Schaeffer’s, there’s not much likelihood of financials seeing any gains this month. They note that short sellers — those banking on further falls — have been bailing on bearish positions lately, “meaning there’s little in the way of sideline cash available to help fuel potential rallies.”

In other words, no chance of a short squeeze to boost XLF.

This chart has been making the rounds, showing a bearish head-and-shoulders pattern for that big financials ETF, and it looks like it’s in a holding pattern, for now:

Still, as this Tweeter says, if financials and energy — another weak spot for this bull market — can hang in there, that could be good for the S&P 500:

Check out: Dr. Doom warns that in financial markets ‘there is a bubble in everything’

Key market gauges

The S&P 500 SPX, +0.14%  , Nasdaq COMP, +0.08%  and Dow DJIA, +0.11%  are mostly higher as trading kicks off. Oil prices CLQ7, +0.02%  have given up on an earlier gain. Europe stocks SXXP, +0.30%  are trying to break a five-day losing run.

Gold GCM7, -0.58%  is taking a hit, after ADP private-sector hiring data. Get the latest action in Market Snapshot.

The buzz

Pinnacle Foods PF, +4.93%  rallied on a report that ConAgra Brands CAG, +3.32%  has approached it about a buyout.

Express EXPR, -19.97%  got hit hard by after a miss and disappointing guidance this morning, but there was better news from Dollar General DG, +3.77%  , whose stock is rising on a profit and revenue beat. Later we’ll hear from Restoration Hardware RH, -1.18%  and Lululemon LULU, +0.93%  .

Hewlett Packard Enterprise HPE, -5.69%  posted disappointing results last night. Investors are now wondering if they bet on the wrong horse after the company split months ago.

Box BOX, +5.56% got a lift from upbeat results and guidance. Its CEO told MarketWatch that all’s well on the free cash-flow front and A.I. is the next frontier.

In her annual “Internet Trends” report, Mary Meeker says she sees big opportunity for online advertising platforms such as Facebook FB, -0.48%  and Snapchat parent Snap SNAP, +0.57%

Amazon AMZN, -0.11%  says it will offer refunds for unauthorized app purchases made by kids.

Ohio is suing five drugmakers over the opioid addiction epidemic. Johnson & Johnson JNJ, +0.11%   , Teva TEVA, +4.94%  , Allergan AGN, +0.50%  and others are being accused of misrepresenting the addictive risk of those painkillers.

Read: Opioids are ravaging the U.S., but they’re still the best pain drug we’ve got

The chart

The below chart from Deutsche Bank lays out the best-performing global financial assets in May.

Note that the S&P 500 is in the middle of what looks like a spread of modest gains, at best — unless you've been buying Greek stocks.

The economy

ADP employment data showed 253,000 jobs were added in May, which it called “rip roaring” growth, and it could bode well for Friday’s jobs data. Meanwhile, weekly jobless claims hit a five-week high of 248,000, though that’s likely just a blip due to the holidays.

Still to come, the final Markit manufacturing PMI at 9:45 a.m., then the ISM manufacturing index and construction spending at 10 a.m. Auto sales are also expected.

Check our preview of this week’s economic data releases

The stat

Getty

At least 16 — That’s the number of waivers President Donald Trump has granted to White House officials , giving them permission to work on issues they dealt with in the private sector.

That four-month tally is equal to the total granted by President Barack Obama during his entire eight years in office.

The quote

“The Russians, in my opinion and based on the intel and counterintel people I’ve talked to, could not have known how best to weaponize that information unless they had been guided.” — That was Hillary Clinton at the Recode technology conference on Wednesday evening.

That sparked some back and forth between her and President Trump. Ah, memories:

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