Major stock indices ended another volatile week mixed with the substantial gains in the Russell 2000 and a decline in the Nasdaq 100 Index as traders rotated to smaller companies on hopes of FED rate cuts.
Treasury bond yields rose with the 30-year bond yield at 4.452% and the 10-Year note at 4.196%. Freddie Mac reported that the average 30-year mortgage rate rose to 6.78%. Crude oil fell to $76.67 a barrel and natural gas fell to $2.044 per MMBTUs. The U.S. dollar index rose to 104.31 and gold fell to $2384.00 an ounce.
In economic reports this week:
- The National Association of Realtors reported that existing home sales fell 5.4% in June from May.
- Sales were also down 5.4% from June of 2023.
- The inventory of unsold homes rose 3.1% and is up 23.4% from a year ago.
- The median sales price of a new home rose to $426,900.
- The Commerce Department reported:
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- The median sales price of a new home was $417,300.
- The supply of new homes for sale was 9.3 months at the current sales rate.
- The first reading of real (adjusted for inflation) gross domestic product accelerated to an annual growth rate of 2.8% in Q2, up from 1.4% in the first quarter.
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- The personal consumption expenditures price index rose 0.1% in June and was up 2.5% from a year ago.
- Excluding volatile food and energy the PCE index rose 0.2% and 2.6% from a year ago. This is the FED’s preferred measure of inflation.
- Goods prices fell 0.2% but services rose 0.2%.
- Personal consumption expenditures (spending) rose 0.3% in June or 0.2% adjusted for inflation.
- Personal incomes rose 0.2%.
- The personal consumption expenditures price index rose 0.1% in June and was up 2.5% from a year ago.
- The Labor department reported:
- Seasonally adjusted first-time claims for unemployment were 235,000, a decrease of 10,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, was 235,500, an increase of 250 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 235,000, a decrease of 10,000 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 22BN 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 rose 5 to 482 and the number of natural gas rigs fell 2 to 101.
- Earnings Insight reported with 41% 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.bea.gov/data/personal-consumption-expenditures-price-index