Major market indices ended a volatile week mixed, with emerging markets and the Nasdaq 100 substantially down and the Dow 30 Industrials and Russell 2000 up modestly. Traders rotated from high flying technology stocks to small caps and value stocks.
The European Central Bank met and held the benchmark interest rate at 3.75% and said more data showing slower inflation would be needed in order to cut rates further.
Treasury bond yields fell with the 30-year bond yield at 4.389% and the 10-Year note at 4.189%. Freddie Mac reported that the average 30-year mortgage rate fell to 6.77%. Crude oil fell to $81.49 a barrel and natural gas fell to $2.197 per MMBTUs. The U.S. dollar index fell to 103.76 and gold rose to $2479.40 an ounce.
In economic reports this week:
- The Federal Reserve reported that industrial production rose 0.6% in June.
- From a year ago, industrial production has risen 1.6%.
- Manufacturing rose 0.4% in June and was up 1.1% year over year.
- Mining, including oil and gas production, rose 0.3 in June and is down 0.6% from a year ago.
- Utility production rose 2.8% and is up 7.6% from a year ago.
- The Commerce Department reported:
- The advanced estimate of retail sales in June were virtually unchanged but were up 2.3% from a year ago.
- Retail sales are not adjusted for inflation, so were negative from a year ago.
- Excluding motor vehicle sales, which were severely impacted by a cyberattack, retail sales rose 0.9% in June.
- Housing starts rose a seasonally adjusted 3.0% in June from the revised May level.
- From June of 2023, housing starts have fallen 4.4%.
- Permits, a sign of future housing starts, rose 3.4% in June but are down 3.1% from June last year.
- The advanced estimate of retail sales in June were virtually unchanged but were up 2.3% from a year ago.
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- Seasonally adjusted first-time claims for unemployment were 243,000, an increase of 20,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, was 234,750, an increase of 1,000 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 243,000, an increase of 20,000 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 was unchanged at 13.3MM BPD.
- Natural gas storage rose 10BN cubic feet and is about at the highest level during the past five years at this time of year.
- Baker Hughes reported the number of oil rigs fell 1 to 477 and the number of natural gas rigs rose 3 to 103.
- Earnings insight reported 2nd quarter earnings. With 14% of the S&P 500 reporting, the blended earnings increase was 8.9%
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.bls.gov/news.release/pdf/cpi.pdf
