Stocks rallied on strong housing data and a decrease in crude oil inventories. The inventory decrease was partly due to increased refining to build gasoline inventory before the summer driving season but also due to the continued effect of supply disruptions in Canada, Nigeria and Libya. The estimate of first quarter growth was revised upwards from 0.5% to 0.8% annual rate. Still slow but expectations are for a better second quarter.
In economic news this week:
- Data provider Markit reported that the preliminary Eurozone purchasing managers index fell to 52.9 in May from 53.0 in April. Keep in mind that anything over 50 represents expansion. Germany and France accelerated but the peripheral countries growth slowed.
- The Labor Department reported first time claims for unemployment fell 10,000 in the prior week to a seasonally adjusted 269,000. This marks the 64th straight week that claims have stayed below 300,000, the longest since 1973. The four week moving average of claims rose 2,750 to 278,500.
- The Commerce Department reported:
- New-home sales rose 16.6% in April, to a seasonally adjusted 619,000. This was the fastest pace in eight years.
- The median price of a new home rose to $321,100, an all-time record.
- The U.S. Energy Information Administration reported in the prior week:
- Crude oil inventories fell 4.23MM barrels.
- Crude oil production fell from 8.80MM barrels to 8.79MM barrels per day.
- Gasoline inventories rose 2.04MM barrels.
- The National Association of Realtors reported that sales of previously owned homes rose 5.1% in April. Pending sales were the highest since February 2006.
- The Commerce Department reported
- Durable goods orders increased a seasonally adjusted 3.4% in April. However, this was largely due to a 64.9% increase in civilian aircraft. Non-defense capital goods orders excluding aircraft actually fell 0.8% in April reflecting that businesses are hesitant to invest in equipment.
- Gross domestic product for the 1st quarter was revised from 0.5% annual growth rate to 0.8% annual growth rate. The higher growth rate was due to a larger gain in residential investment and less of a drag from private inventories and foreign trade.
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
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.