Major stock indices ended a volatile week mixed as traders reduced expectations of interest rate cuts but pushed up artificial intelligence stocks based on earnings. The Nasdaq 100 index ended the week with a gain.
The Federal Reserve released the minutes of the meeting ending May 1st. The minutes stated, “Participants observed that while inflation had eased over the past year, in recent months there had been a lack of further progress toward the Committee’s 2 percent objective,” Fed members comments firmed the outlook of higher for longer.
Treasury bond yields rose with the 30-year bond yield at 4.582% and the 10-Year note at 4.478%. Freddie Mac reported that the average 30-year mortgage rate fell to 6.94%. Crude oil fell to $77.52 a barrel and natural gas rose to $2.847 per MMBTUs. The U.S. dollar index rose to 104.75 and gold fell to $2338.50 an ounce.
In economic reports this week:
- The National Association of Realtors reported that existing home sales fell a seasonally adjusted 1.9% in April, the second straight month.
- Existing home sales were also down 1.9% from last April.
- The median price of an existing home sales rose to $407,600 up from $392.900 in March.
- The inventory of unsold homes rose from 3.2 months to 3.5 months.
- The Commerce Department reported:
- New home sales fell a seasonally adjusted 4.7% in the month of April and are down 7.7% from last April.
- The median sales price of a new home was $433,500.
- New home sales fell a seasonally adjusted 4.7% in the month of April and are down 7.7% from last April.
- The Labor Department reported:
- Seasonally adjusted first-time claims for unemployment were 215,000, a decrease of 8,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, was 219,750, an increase of 1750 from the previous week’s revised level.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- Seasonally adjusted first-time claims for unemployment were 215,000, a decrease of 8,000 from the previous week’s revised level.
- 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 was unchanged at 13.1MM BPD.
- Natural gas storage rose 78BN 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 497 and the number of natural gas rigs fell four to 99.
- Factset reported that with 96% of S&P 500 companies reporting, the blended earnings increase so far is 6.0% from a year ago.
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
