US stocks were lower this week as traders took profits following last week’s gains. European stocks fell and Asian stocks had small gains. Treasury bonds rose as yields fell. Commodity prices fell due to high inventories and concerns about China’s growth. Earnings season was in full swing. Generally speaking exporters and multinationals had weak earnings and companies with net imports did well. While employment continues to improve, productivity is sluggish eating into company profits. This makes sense as companies hire new workers it takes time for them to be trained and become productive.
Economic Numbers this week include:
- The National Association of Realtors reported:
- Existing home sales increased 3.2% to an annual pace of 5.45 million in June, better than forecasts and the highest since 2007. May sales were revised down to a 5.32 million pace.
- The average selling price of a home rose to $236,400, 6.5% above a year ago.
- The Commerce Department reported that new home sales fell 6.8% in June, although this figure is very volatile. Other data such as the housing starts have supported strong new home growth.
- The Labor Department reported that first time claims for unemployment decreased 26,000 to a seasonally adjusted 255,000 in the prior week, much better than expectations. This number was the lowest since November 1973. It’s important to note that while the number of claims were lower in 1973, first time claims as a percentage of the now larger work force has never been lower in the 45 year history of this statistic. The four week moving average of claims fell 4,000 to 278,500.
- A private survey of factory activity in China, the Caixin China Manufacturing Purchasing Managers Index, preliminarily shows 48.2 in July worse than the 49.4 in May. Keep in mind that anything under 50 represents contraction. In response China announced a list of measures on Friday to increase trade (both imports and exports).
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF® Erik Smith
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
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These are the opinions of Loren Rex and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.
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