A pickup in the FED’s preferred measure of inflation, prompted a selloff on Wednesday but major stock indices ended mostly higher for this holiday shortened week. The Federal Reserve released minutes of their November meeting where Fed members discussed slowing or pausing rate hikes unless inflation continues to fall.
Treasury bond yields fell with the 30-year bond yield at 4.382% and the 10-Year note at 4.199%. Freddie Mac reported that the average 30-year mortgage rate fell to 6.81%. Crude oil rose to $69.23 a barrel and natural gas rose to $3.331 per MMBTUs. The U.S. dollar index fell to 105.96 and gold rose to $2,684.60 an ounce.
In economic reports this week:
- The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index fell 0.1% in September but was up 3.89% from a year ago.
- The Commerce Department reported:
- New home sales fell a seasonally adjusted 17.3% in October from the revised September sales. This was down 9.4% from October 2023.
- Based on the October sales rate, there was a 9.5-month supply of new homes for sale.
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- Durable goods orders rose 0.2% in October.
- Durable goods orders rose 0.2% in October.
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- Personal consumption expenditures rose 0.4% in October unadjusted for inflation.
- The PCE price index increased 0.2% in October and 2.3% from a year earlier, this was up from 2.1% year over year in September.
- Excluding volatile food and energy, prices rose 0.3% and were up 2.8% from last October. This was up from 2.7% Y.O.Y. This is the FED’s preferred measure of inflation.
- Personal incomes rose 0.6%.
- The personal savings rate was 4.4%.
- The Labor department reported:
- Seasonally adjusted first-time claims for unemployment were 213,000, a decrease of 2,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, was 217,000 a decrease of 1,250 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 213,000, a decrease of 2,000 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 rose from 13.2MM BPD to 13.5MM BPD.
- Natural gas storage fell 2BN cubic feet and is above highest level during the past five years at this time of year.
- Baker Hughes reported the number of oil rigs fell 2 to 477 and the number of natural gas rigs rose 1 to 100.
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
