Major market indices ended the week lower on an increased likelihood of for a FED rate hike later this month. The FED released it’s minutes from the July meeting. Some FED members favored hiking in June but the FED paused for that meeting.
ADP released a very strong private hiring report for June on Thursday which caused Treasury yields to soar and accelerated the stock selloff. However, the Labor Department’s non-farm payroll report on Friday, while significantly lower than the ADP number is still considered strong at over 200,000 jobs added in June. Most analysts give more weight to the Labor Department report than the ADP report but it comes out a day later.
Purchasing manager’s indices show U.S. and global growth was slowing in June.
Treasury bond yields rose sharply with the 30-year bond yield at 4.048% and the 10-Year note at 4.062%. Freddie Mac reported that the average 30-year mortgage rate rose to 6.81%. Crude oil rose to $73.69 a barrel and natural gas fell to $2.556 per MMBTUs. The U.S. dollar index fell to 102.28 and gold rose to $1931.10 an ounce.
- S&P Global released purchasing manager’s indices for June. Keep in mind anything over 50 represents expansion and anything under 50 represents contraction.
- China manufacturing PMI fell from 50.9 to 50.5.
- China services PMI fell from 57.1 to 53.9.
- Japan manufacturing PMI fell from 50.6 to 49.8.
- Japan services PMI fell from 55.9 to 54.0.
- U.S. manufacturing fell from 48.4 to 46.3.
- U.S. services PMI fell from 54.9 to 54.4.
- Eurozone manufacturing PMI fell from 44.8 to 43.4.
- Eurozone services PMI fell from 55.1 to 52.0.
- Canada manufacturing fell from 49.0 to 48.8.
- Mexico manufacturing rose from 50.5 to 50.9.
- The Commerce Department reported:
- New orders for manufactured goods rose 0.3% in May.
- New orders for manufactured goods rose 0.3% in May.
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- The U.S. trade deficit fell 7.3% in May as both exports and imports fell.
- The U.S. trade deficit fell 7.3% in May as both exports and imports fell.
- The Labor Department reported:
- The number of jobs openings fell 496,000 to 9.8MM.
- There were 1.6 job openings for every unemployed worker.
- There were 6.2MM hires and 5.9MM separations in May.
- 4MM of the separations were quits.
- The U.S. non-farm payrolls increased 209,000 jobs in June, the slowest month since December 2020. May’s job gains were revised down to 306,000.
- The unemployment rate was little changed at 3.6%.
- Approximately 6.0MM people are unemployed, little changed from May.
- Hourly earnings rose 0.4% in June and are up 4.4% from last June.
- Seasonally adjusted first-time claims for unemployment were 248,000, an increase of 12,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, were 235,250 a decrease of 3500 from the previous week’s revised level.
- The number of jobs openings fell 496,000 to 9.8MM.
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- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
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- 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 12.2MM BPD to 12.4MM BPD.
- Natural gas storage rose 72BN cubic feet and is above the 5-year average at this time of year.
- Baker Hughes reported the number of active oil rigs fell 5 to 540. The number of active natural gas rose 11 to 135.
Please call us if you have any questions.
Loren C. Rex, CFP®, MA Erik A Smith, AIF®
Founder / Emeritus 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.
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.bls.gov/news.release/jolts.nr0.htm
https://www.pmi.spglobal.com/public/release/pressreleases
https://www.bls.gov/news.release/jolts.nr0.htm
