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Schwab Market Update

U.S. equities started Q3 off on a high note, rallying from the lows of the day to finish in the plus column. However, it wasn't enough to keep the major indexes out of negative territory for the week. The moves came as the global markets continued to grapple with recession uncertainty, which has ramped up as monetary policies tighten and economic data has suggested slowing activity. The economic calendar showed that manufacturing activity continued to slow in June, while construction spending unexpectedly dipped in May. Treasuries rose, with yields at the short-end noticeably lower, and the U.S. dollar was higher, while crude oil prices gained solid ground and gold was nearly flat. In equity news, Micron Technology topped earnings estimates but its guidance came in well below expectations, Kohl's Corporation fell after calling off takeover negotiations with Franchise Group, and GM issued mixed guidance. Europe turned to the upside in late action to finish mostly higher, while Asia was broadly lower.
Sector Views

Schwab's views on the Real Estate sector.
Sector Views

Schwab's views on the Information Technology sector.
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Schwab's views on the Health Care sector.
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Schwab's views on the Energy sector.
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Schwab's views on the Consumer Discretionary sector.
Sector Views

The energy picture is anything but clear. There are numerous scenarios that could result in much higher or lower oil prices. Until there is more clarity, we think it's prudent to maintain a market-weight Energy sector allocation.
Sector Views

Schwab's views on the Materials sector.
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Schwab's views on the Industrials sector.

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