Major stock indices continued to gain except for the Dow 30 Industrials which ended the week nearly flat.  Corporate earnings and strong economic growth are attributed to the gains.  Consumer loan delinquencies are now above pre-pandemic levels but are running below than long term averages.

Treasury bond yields rose with the 30-year bond yield at 4.374% and the 10-Year note at 4.167%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.64%.  Crude oil rose to $76.54 a barrel and natural gas fell to $1.859 per MMBTUs.  The U.S. dollar index rose to 104.08 and gold rose to $2038.70 an ounce.

• The Federal Reserve reported household debt rose 1.2% in the fourth quarter.  At year end:
  • 3.1% of outstanding debt is in delinquency, above pre-pandemic levels.
    • 8.5% of credit card balances are in delinquency.
    • 7.7% of auto loans are in delinquency.

• S&P Global released its services purchasing manager’s indices for January.  Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
  • U.S. services PMI rose from 51.4 to 52.5.
  • China services PMI fell from 52.9 to 52.7.
  • Canada services PMI rose from 44.6 to 45.8.
  • Japan services PMI rose from 51.5 to 53.1.
  • Europe services PMI fell from 48.8 to 48.4.
• The Commerce Department reported:
  • The U.S. Trade Deficit rose 0.5% in December as both imports and exports rose.

• • Wholesale inventories rose 0.4% in December after falling 0.4% in November.
    • The inventories to sales ratio in December was 1.34 versus 1.40 in December 2022.

• The Labor Department reported:
  • Seasonally adjusted first-time claims for unemployment were 218,000 a decrease from the previous week’s revised level of 227,000.
    • The 4-week moving average of claims, designed to smooth out volatility, was 212,250, an increase of 3750 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 oil rose from 13.0MM BPD to 13.3MM BPD.
  • Natural gas storage fell 75BN 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 was unchanged at 499 and the number of natural gas rigs rose 4 to 121.
• Factset reported, the blended earnings increase reported so far for Q4 was 2.9%.

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.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#overview

https://www.bls.gov/jlt/

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

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

https://www.newyorkfed.org/newsevents/news/research/2024/20240206