Wall Street opened flat, and continues to hover between green and red, after President Trumps historic meeting with North Korean leader Kim Jong Un.  The two leaders signed a so called comprehensive denuclearization document that stated Pyongyang would work towards “complete denuclearization of the Korean Peninsula."  After the press conference, President Trump said that he will end joint military exercises with South Korea.  

Defensive stocks are on the defense after the summit, pun intended, which we believe is not warranted:

• Raytheon (RTN) is down $5.77 (2.73%) to $206.79
• Northrop Grumman (NOC) is down $4.71 (1.41%) $329.65
• General Dynamics (GD) is lower by $2.82 (1.40%) @ $198.86 

Retail continues its moon-shot move with help from Dollar Tree (DLTR), William-Sonoma (WSM) and RH, formerly Restoration Hardware (RH).  The S&P Retail ETF is up 9% in the past 8 trading days and up over 17% since the beginning of April.   

CPI

CPI for the month of May was up .02% and 2.8% year over year.  Excluding food and energy, known as the core CPI was up 0.2% in May and 2.2% year over year.

The CPI report is broken into four categories:  Categories and weighting of importance (all items = 100%).

• Food 13.3%
• Energy 7.8%
• Commodities (ex food and energy) 19.9%
• Services (less energy) 59.0%

Key Trends Year over Year

• Food +1.2% (at home +.1% and away from home +2.7).
• Energy +11.7%, but crude is coming down.
• Commodities -0.3% as some massive swoons in apparel, etc. (I don't know why).
• Services +3.0% (shelter +3.5% driven by rent +3.6%, but owner equivalents +3.4%, which coupled with news on homeowner equity could help the notion of "wealth effect."  However, some economists would fret it could create inflation and too much spending.

Despite headlines screaming of the highest inflation reading in more than six years, the overall narrative of the CPI report shouldn't change the Fed's game planning.

Today is the beginning to the Federal Reserve’s two-day policy meeting.  The Fed is widely anticipated to raise rates .25 basis points to 2%.  The statement and question and answer period will be dissected for any hints on additional rate hikes going forward.