Major stock indices ended the week mixed with the best performance in the Nasdaq 100 index and the worst performance in the developed international index.  In May, the headline consumer price index was zero but prices have risen 3.3% over the past year.  The FED met and while acknowledging the trend of inflation, still predicts there will only be one rate cut this year.  The World Bank upgraded its forecast for economic growth for 2024 to 2.6% mainly due to strong performance in the U.S.  2.6% is the same growth rate as 2023.  The World Bank forecasts 2.7% growth for 2025 and 2026.

Treasury bond yields fell with the 30-year bond yield at 4.325% and the 10-Year note at 4.222%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.95%.  Crude oil rose to $78.42 a barrel and natural gas fell to $2.890 per MMBTUs.  The U.S. dollar index rose to 105.51 and gold rose to $2346.90 an ounce.

In economic reports this week:

• The Treasury reported that the deficit in May was $347BN and is $1.202TN for the fiscal year to date.
• The Labor Department reported:
  • The consumer price index on a seasonally adjusted basis was unchanged in May following a 0.3% rise in April.
    • From a year ago, consumer prices have risen 3.3%. down from 3.4% year over year in April.
    • Excluding volatile food and energy, core prices rose 0.2% in May.
    • Gasoline prices fell 0.6%.
    • Food increased 0.1%.
    • Used cars rose 0.6%.
    • Shelter rose 0.4%.
  • The producer price index fell a seasonally adjusted 0.2% in May after increasing 0.5% in April. 
    • Excluding volatile food, energy and trade services, the PPI was unchanged.
    • Goods prices fell 0.8% in May.
    • Services were unchanged.
    • From a year ago, producer prices have risen 1.1% and 2.9%, excluding food and energy.
  • Seasonally adjusted first-time claims for unemployment were 243,000, an increase of 13,000 from the previous week’s revised level.
    • The 4-week moving average of claims, designed to smooth out volatility, was 227,000, an increase of 4,750 from the previous week’s revised level. 
    • 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 rose from 13.1MM BPD to 13.2MM BPD.
  • Natural gas storage rose 74BN 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 4 to 488 and the number of natural gas rigs was unchanged at 98.

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

https://www.census.gov/economic-indicators

https://www.bls.gov/news.release/prod2.nr0.htm

https://www.worldbank.org/en/publication/global-economic-prospects?intcid=ecr_hp_headerB_2024-06-11-GEPReport

https://www.bls.gov/cpi/home.htm

https://www.bls.gov/ppi/home.htm

https://www.fiscal.treasury.gov/files/reports-statements/mts/mts0524.pdf