Major stock indices ended the week modestly lower. Economic data was mixed as both existing home sales and new home construction fell. Retail sales were unchanged in July due to lower gasoline prices and industrial production rose.
China reacted to slower growth by cutting two key interest rates by 0.1% and also pumping $59.3BN into the financial system to increase lending.
Turkey, despite having 80% inflation, cut its main policy rate from 14% to 13%.
Treasury bond yields rose with the 30-year bond at 3.214% and the 10-Year note at 2.973%. 30 year mortgage rates ended at 5.68%. Crude oil fell to $89.95 a barrel and natural gas rose to $9.28 per MMBTUs. The U.S. dollar index rose to 108.10. Gold fell to $1760 an ounce.
In the economic numbers:
- China’s National Bureau of Statistics reported:
- Fixed investment for the first seven months of 2022 rose 5.7% from the same period last year.
- Industrial output for the same period rose 3.8%.
- Retail sales for the period rose 2.7%.
- The gross domestic product in the second quarter rose 0.4%.
- The National Association of Realtors reported that existing home sales fell 6% in July from June and 20% below last July.
- The Commerce Department reported:
- Housing starts fell 9.6% in the month of July and 8.1% from a year earlier.
- Building permits, an indicator of future housing starts fell 1.3%.
- Completed housing starts rose 1.1% in July.
-
- Retail Sales were unchanged in July after rising 0.8% in June.
- Retail sales are not adjusted for inflation.
- Gasoline spending fell 1.8% on lower prices.
- Auto sales fell 1.6% on short supply.
- Excluding gasoline and autos retail sales rose 0.7%.
- Business inventories rose 1.4% in June following a revised 1.6% rise in May.
- Retail Sales were unchanged in July after rising 0.8% in June.
- Redfin reported that 16% of all home-purchase agreements were cancelled in July.
- The Federal Reserve reported that industrial production rose 0.6% in July, following three months of declines.
- Manufacturing rose 0.7%.
- Motor vehicle production rose 6.6% on an easing of semi-conductor shortages.
- Excluding autos, manufacturing rose 0.3%.
- Utility output fell 0.8% on cooler weather.
- Oil and gas production rose 3.3%.
- Manufacturing rose 0.7%.
- The Labor Department reported:
- Seasonally adjusted first time claims for unemployment fell to 250,000, down from a revised 252,000 in the prior week.
- The 4-week moving average of claims, designed to smooth out volatility, declined to 246,750 from a revised 249,500.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- Seasonally adjusted first time claims for unemployment fell to 250,000, down from a revised 252,000 in the prior week.
- 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 fell from 12.2MM BPD 12.1MM BPD.
- Natural gas storage rose 18BN cubic feet and is below the 5-year average at this time of year.
- Baker Hughes reported the number of active oil rigs was unchanged at 601. The number of active natural gas rigs fell 1 to 159.
Please call us if you have any questions.
Thank you,
Loren C. Rex, CFP®, MA Erik A Smith, AIF®
Founder / Emeritus President & C.E.O.
269-441-4143 517-795-2025
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.
