Major market indices ended the week with modest losses. The biggest losses were in the Nasdaq 100 Index and Emerging Markets. Traders were concerned that AI technology stocks may have risen too quickly. Consumer spending adjusted for inflation declined slightly in April and the PCE price index rose as expected. 1st Quarter gross domestic product was revised lower.
Treasury bond yields rose with the 30-year bond yield at 4.634% and the 10-Year note at 4.495%. Freddie Mac reported that the average 30-year mortgage rate rose to 7.03%. Crude oil rose to $77.53 a barrel and natural gas fell to $2.575 per MMBTUs. The U.S. dollar index fell to 104.47 and gold rose to $2361.50 an ounce.
In economic reports this week:
- The S&P CoreLogic Case-Shiller Home Price National Index rose 1.28% in March and was up 6.49% from last March.
- The Commerce Department reported:
- Real gross domestic product in the first quarter was revised down from 1.6% annual rate to 1.3% annual rate.
- This was down sharply from the fourth quarter rate of 3.4%.
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- Personal consumption rose 0.2% in April, down from 0.5% increase in March.
- Adjusted for inflation personal consumption fell 0.1%.
- The PCE price index rose 0.3% in April and is up 2.7% from a year ago.
- Excluding volatile food and energy, the PCE price index rose 0.2% in April and is up 2.8% from a year ago. This is the FED’s preferred measure of inflation.
- Personal consumption rose 0.2% in April, down from 0.5% increase in March.
- The Labor Department reported:
- Seasonally adjusted first-time claims for unemployment were 219,000, an increase of 3,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, was 222,500, an increase of 2,500 from the previous week’s revised level.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- Seasonally adjusted first-time claims for unemployment were 219,000, an increase of 3,000 from the previous week’s revised level.
- 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 oil was unchanged at 13.1MM BPD.
- Natural gas storage rose 84BN cubic feet and was above the highest level during the past five years at this time of year.
- Baker Hughes reported the number of oil rigs fell 1 to 496 and the number of natural gas rigs rose 1 to 100.
- Factset reported that with 98% of S&P 500 companies reporting, the blended earnings increase so far is 5.9% from a year ago.
Please call us if you have any questions.
Loren Rex – Emeritus
Erik A Smith, AIF® – President & C.E.O.
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. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).
Sources:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
https://ir.eia.gov/ngs/ngs.html
https://www.freddiemac.com/pmms
https://www.wsj.com/market-data?mod=nav_top_subsection
https://bakerhughesrigcount.gcs-web.com/na-rig-count
