Blog Post

Stock End the Week With Modest Gains As Job Creation is Strong and Most Economic Data is Positive

Most major stock indices ended the week with modest gains with the Nasdaq 100 Index performing the best.  May provided another robust month of job gains and most economic data this week was positive.

OPEC+ met and decided to extend their production cuts with a 3.66 million barrels per day cut extended until the end of 2025 and 2.2 million barrels per day of cuts being phased out between October 2024 and September 2025.

The European Central Bank met and cut its benchmark interest rate 0.25% to 4.25%.  The ECB’s statement said, “The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. It will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim. The Governing Council will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction. In particular, its interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. The Governing Council is not pre-committing to a particular rate path.”  However, the ECB actually raised its inflation forecast for 2025 from 2.0% to 2.2%.

Treasury bond yields fell with the 30-year bond yield at 4.625% and the 10-Year note at 4.375%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.99%.  Crude oil fell to $75.69 a barrel and natural gas rose to $2.945 per MMBTUs.  The U.S. dollar index rose to 104.92 and gold fell to $2324.80 an ounce.

In economic reports this week:

  • S&P Global released its purchasing manager’s indices for May.  Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
    • China manufacturing PMI rose from 51.4 to 51.7.
    • China services PMI rose from 52.5 to 54.0.
    • Japan manufacturing PMI rose from 49.6 to 50.4.
    • Japan services PMI fell from 54.3 to 53.8.
    • U.S. manufacturing PMI rose from 50.0 to 51.3.
    • U.S. services PMI rose from 51.3 to 54.8.
    • Canada manufacturing PMI fell from 49.4 to 49.3.
    • Canada services PMI rose from 49.3 to 51.1.
    • Mexico manufacturing PMI rose from 51.0 to 51.2.
    • Eurozone manufacturing PMI rose from 45.7 to 47.3.
    • Eurozone services PMI fell from 53.3 to 53.2.
  • Ward’s Intelligence reported that U.S. auto sales, not seasonally adjusted, were at an annual rate of 15.9mm vehicles in May up from a 15.8mm vehicle pace in April.
    • The sales of U.S. made cars actually fell.
    • The record highest rate of sales was 17.5mm in 2016.
  • The Commerce Department reported:
    • Construction spending fell a seasonally adjusted 0.1% in April after falling 0.2% in March.
      • Private construction also fell 0.1%.
      • Public construction fell 0.2%.
    • Factory orders increased 0.7% in April after increasing 0.7% in March.
    • The trade deficit rose 8.7% in April as both imports and exports increased.
    • Wholesale inventories rose 0.1% in April after falling 0.5% in March.
  • The Labor Department reported:
    • Labor productivity was revised to a 0.2% increase in the first quarter, down from 0.3% previously reported.  Productivity increases lessen the inflation impact from wage increases.
      • Unit labor costs increased at a 4.0% annual rate.
      • Hourly compensation rose at a 4.2% rate, down from an initially reported 4.7%.
    • The U.S. added a robust 272,000 jobs in May.
      • The unemployment rate moved slightly higher to 4.0% versus 3.9% in April.
      • Hourly wages rose 0.4% in May and are up 4.1% from a year ago.
    • Seasonally adjusted first-time claims for unemployment were 229,000, an increase of 8,000 from the previous week’s revised level.
      • The 4-week moving average of claims, designed to smooth out volatility, was 222,500, a decrease of 750 from the previous week’s revised level. 
      • For the full unemployment report go here: .
  • The EIA weekly oil report is here: .  Also, the EIA reported in the prior week:
    • Field production of crude oil was unchanged at 13.1MM BPD.
    • Natural gas storage rose 98BN 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 492 and the number of natural gas rigs fell 2 to 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).



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