Major stock indices ended modestly lower as concerns over the Israel-Iran war weighed down sentiment.  The largest decline was in developed international stocks, and the smallest was in the Russell Small Cap 2000.  Economic data pointed to a gradually slowing economy as industrial production, housing starts and retail sales all contracted,

The Federal Reserve met and decided to leave its benchmark interest rate at a range of 4.25% to 4.5%.  The FED is still predicting two rate cuts before year end.

The Bank of England met and chose to leave its benchmark interest rate unchanged at 4.25%.

The Social Security Trust Fund released its annual report to Congress.  The retirement trust fund is likely to deplete in 2033, one year earlier than in last year’s report.  This was likely due to Congress’ elimination of the Windfall Elimination Provision and the Government Pension Offset which boosted benefits to about 2.8mm people.  The report said Congress needs to deal with the trust funds by either raising payroll taxes, cutting benefits or a combination of both.  Otherwise benefits will likely be cut to 77% when the trust fund depletes. 

Treasury bond yields were mixed with the 30-year bond yield at 4.926% and the 10-Year note at 4.423%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.81%.  Crude oil rose to $75.29 a barrel and natural gas rose to $4.013 per MMBTUs.  The U.S. dollar index rose to 98.72 and gold fell to $3363.00 an ounce.

In economic reports last week:

• The Federal Reserve reported that seasonally adjusted industrial production fell 0.2% in May.  From last May industrial production has risen 0.6%.
  • Manufacturing was up 0.1 in May and 0.5% year over year.
  • Mining, including oil and gas production, was up 0.1% in May and 2.9% from a year ago.
  • Utilities fell 2.9% and were down 1.6% from May 2024.
• The Commerce Department reported:
  • Advanced monthly retail sales, seasonally adjusted in May fell 0.9% but were up 3.0% from a year ago.
    • April was revised to -0.1%.

• • Seasonally adjusted housing starts fell 9.8% in May and were down 4.6% from a year ago.
    • Permits, a sign of future starts, fell 2.0% and were down 1.0% from last May.

• The Labor Department reported:
  • Import prices were unchanged in May and have risen 0.2% from a year ago.
  • Fuel prices fell 4.0% in May and were down 15.7% from a year ago.
  • Prices excluding fuel rose 0.3% and were up 1.7% year over year.

              Source: U.S. Department of Labor

• • Seasonally adjusted first-time claims for unemployment were 245,000, down 5,000 from the previous week’s revised level.
    • The 4-week moving average of claims, designed to smooth out volatility, were 245,500, an increase of 4,750 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: Weekly Petroleum Status Report.  Also, the EIA reported in the prior week:
  • Field production of crude oil rose from 13.428MM BPD 13.431MM BPD.
  • Natural gas storage rose 95BN cubic feet and was above its average level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs fell 1 to 438 and the number of natural gas rigs fell 2 to 111.

Please call us if you have any questions.

Loren Rex – Emeritus

Erik A Smith, AIF® – President & C.E.O.

Nicholas Acri, CFP® – Partner & Wealth Advisor

Dylan Thomas, CFP® – Partner & Wealth Advisor

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/cpi/

https://www.bls.gov/ppi/

https://www.fiscal.treasury.gov/reports-statements/mts/current.html