U.S. Stocks ended the week with modest declines but emerging markets ended with modest gains. On Monday large tech stocks rebounded from their selloff last week but the Monday gains were given up by the end of the week. Technology stocks were hit on Friday due to a major chipmaker delaying their next generation of processors.
On Tuesday, the European Union agreed on a $2TN coronavirus recovery plan. Under the agreement, the EU will be issuing common debt for the first time to help pay for the plan. The plan includes grants, loans and direct fiscal spending. The package will target the countries hardest hit by the virus and was approved by each member country.
Both new and existing home sales rose sharply in June as record low interest rates have stimulated demand.
Treasury yields fell with the 30-year bond yield at 1.233% and the 10-Year note at 0.585%. Crude oil rose to $41.23 a barrel and natural gas rose to $1.863 per MMBTUs. The U.S. dollar index ended the week lower at 94.49 and gold prices rose to $1899.90 an ounce.
In the economic numbers this week:
- The National Association of Realtors reported the sales of previously owned homes rose 20.7% in June, the biggest monthly increase in records going back to 1968. However, June existing home sales were 11.3% down from June 2019. Existing home sales were hurt by low inventories but boosted by record low mortgage rates.
- The Commerce Department reported new home sales rose 13.8% to 776,000, the highest in 13 years. This follows an increase of 19.4% in May and was fueled by record low interest rates.
- The Labor Department reported:
- 1.42MM workers filed initial unemployment claims last week, up from the previous week as some states reverse course on reopening.
- Continuing unemployment claims fell from 17.304MM to 16.197MM as some workers returned to work.
- Factset reported with 26% of the S&P500 companies reporting 2nd quarter earnings, the blended earnings decline is 42.4%.
- The EIA weekly oil report is here wpsrsummary. Also, the EIA reported in the past week:
- Field production of crude oil was unchanged at 11.0MM barrels per day. The peak production at the end of February was 13.1MM barrels per day.
- Natural gas storage rose by 37BN cubic feet and is above the five year average at this time of year.
- Baker Hughes reported the number of active oil rigs rose 1 to 181 and the number of active natural gas rigs fell 3 to 68.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, 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.