Stock indices were mixed for the week with the Nasdaq performing the best but developed international, emerging markets and small cap indices with losses.
May’s jobs report showed the most jobs added since August of last year. Still, we are about 6.5MM fewer employed than at the beginning of 2020.
Dallas FED President Robert Kaplan said that the FED should start tapering bond purchases sooner rather than later. He also predicted that a taper from the $120BN a month in bond purchases should go smoother that it did in 2013’s taper tantrum as market participants know what to expect. He said, “These purchases are very adept at stimulating demand, but we’ve got plenty of demand. Our problem is supply, and these purchases are not very effective when you’ve got a supply issue.”
Treasury yields fell with the 30-year bond yield closing at 2.046% and the 10-Year note closing at 1.437%. Crude oil rose to $75.19 a barrel and natural gas rose to $3.702 per MMBTUs. The U.S. dollar index rose to 92.24 and gold rose to $1787.70 an ounce.
In the economic numbers this week:
- The Commerce Department reported the U.S. trade deficit grew 3.1% in May. Both exports and imports rose with imports rising faster. Imports of crude oil, lumber, food and beverages rose the fastest.
- The Labor Department reported:
- The U.S. added a net 850,000 jobs in June, the largest monthly increase in 10 months. This was up from the 583,000 added in April. The unemployment rate ticked up from 5.8% to 5.9% as more people entered the workforce.
- A seasonally adjusted 364,000 workers filed initial claims for unemployment in the week ending June 26th down from a revised 415,000 the week before. This is a post pandemic low.
- The 4-week moving average of claims, designed to smooth out volatility, fell 6,000 to 392,750.
- Continuing claims were nearly unchanged at 3.5MM in the week ending June 19th.
- A broader measure of claims including extended benefits, pandemic assistance and other programs fell from 14.8MM to 14.7MM in the week ending June 12th.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude was 11.1MM BPD.
- Natural gas storage rose 76BN cubic feet and is below the average level at this time of year during the past five years.
- Baker Hughes reported the number of active oil rigs rose 4 to 376. The number of active natural gas rigs increased 1 to 99.
Please call us if you have any questions.
Loren C. Rex, CFP®, MA Erik A Smith AIF®
President Managing Partner
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. The Indices mentioned are unmanaged and cannot be invested into directly.