Major stock indices ended the week higher with the largest gain in the Nasdaq Composite Index.  Inflation readings this week were mixed with consumer prices above expectations and producer prices below expectations.  The Federal budget deficit increased faster than expected in the October through December quarter.

Treasury bond yields were mixed with the 30-year bond yield at 4.207% and the 10-Year note at 3.953%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.66%.  Crude oil fell to $72.67 a barrel and natural gas rose to $2.623 per MMBTUs.  The U.S. dollar index fell to 102.41 and gold fell to $2051.20 an ounce.

• The Federal Reserve reported that consumer credit rose at a 5.7% annual pace in November.
  • Revolving credit rose at a 17.7% rate.
  • Non-revolving credit rose 1.5% rate.    
• The Commerce Department reported:
  • The trade deficit fell 2.0% in November.
    • Both exports and imports fell.
• Wholesale inventories fell 0.2% in November following a revised 0.3% fall in October.
  • The ratio of inventories to sales was 1.34 down from 1.39 last November.
• The Treasury Department reported:
  • The fiscal deficit for October through December was over $509BN 21% higher than the same period last year.
  • The federal debt is now over $34TN.
• The Labor Department reported:
  • The consumer-price index rose 0.3% in December up from 0.1% in November.
    • From a year earlier, consumer prices rose 3.4% up from 3.1% year over year in November.
    • An increase in shelter accounted for over half of the increase.
    • Food prices rose 0.2%.
    • Energy prices rose 0.4% in December after falling 2.3% in November.
    • Excluding volatile food and energy, prices rose 0.3% in December as well as November.
      • From a year ago the increase in excluding food and energy was 3.9% down from 4.0% in November.
  • The producer-price index fell 0.1% in December following a 0.4% drop in November.
    • Half the decrease was due to a 12.4% drop in diesel fuel.
    • Excluding volatile food, energy and trade services, producer prices rose 0.2% in December following a 0.1% increase in November.  For the year, core producer prices rose 2.5%.
  • Seasonally adjusted first-time claims for unemployment were 202,000, a decrease from the previous week’s revised level of 203,000.
    • The 4-week moving average of claims, designed to smooth out volatility, was 207,750, a decrease of 250 from the previous week’s revised level. 
    • For the full unemployment report go here:  https://www.dol.gov/ui/data.pdf .
• 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 13.2MM BPD.
  • Natural gas storage fell 140BN cubic feet and above the highest it has been during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs fell 2 to 499 and the number of natural gas rigs fell 1 to 117.

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://fiscaldata.treasury.gov/americas-finance-guide/national-deficit/

https://www.bls.gov/news.release/ppi.nr0.htm

https://www.bls.gov/news.release/cpi.nr0.htm