Major stock indices ended the week mixed as the consumer price index rose less in April than in March.  However, 3.4% year over year CPI gain, still well above the FED’s target of 2.0%.  Fed members spoke this week and supported the higher for longer mantra. Retail sales were flat in April while industrial production, adjusted for inflation, fell and housing starts rose.

Treasury bond yields fell with the 30-year bond yield at 4.560% and the 10-Year note at 4.423%.  Freddie Mac reported that the average 30-year mortgage rate fell to 7.02%.  Crude oil rose to $79.95 a barrel and natural gas rose to $2.637 per MMBTUs.  The U.S. dollar index fell to 104.48 and gold rose to $2419.90 an ounce.

In economic reports this week:

• The Federal Reserve reported that industrial production was nearly unchanged in April and declined 0.4% from last April.
  • Manufacturing fell 0.3% in April and is down 0.5% from a year ago.
  • Mining, including oil and gas production, fell 0.6% in April and is down 1.6% year over year.
  • Utilities rose 2.8% in April and is up 2.3% from last April.
• The Commerce Department reported:
  • Seasonally adjusted retail sales were unchanged in April after rising 0.6% in March.  Retail sales are not adjusted for inflation, so given that, this represents a decline in April.
    • Sales at gasoline stations rose 3.1% and are up 4.0% from a year ago.
    • Sales at motor vehicle and parts dealers fell 0.8% but are up 0.8% from a year ago.
• • Housing starts rose a seasonally adjusted 5.7% in the month of April but are down 0.6% from April 2023.
    • Single family housing starts fell 0.4% in April but are up 17.7% year over year.
    • Multifamily housing starts (five or more units) rose 31.4% in the month of April but are down 32.9% from last April.
  • Permits, a sign of future housing starts, fell 3.0% in April and are down 2.0% from last April.
• The Labor Department reported:
  • The consumer price index rose 0.3% in April after rising 0.4% in March.
    • Food prices were unchanged.
    • Energy costs rose 1.1%.
    • Excluding volatile food and energy, prices rose 0.3% in April.
    • New vehicle prices fell 0.4%.
    • Used vehicle prices fell 1.4%.
    • Shelter costs rose 0.4%.
    • From a year ago, prices rose 3.4% in April down from 3.5% year over year in March.
  • The producer price index rose 0.5% in the month of April up from a downwardly revised -0.5% in March.
    • Services rose 0.6%.
    • Goods rose 0.4%.
    • Hospital outpatient care fell 0.1%.
    • Airfares fell 3.8%.
    • The PPI has risen 2.2% for the 12 months ending in April
  • Seasonally adjusted first-time claims for unemployment were 222,000, an increase of 10,000 from the previous week’s revised level.
    • The 4-week moving average of claims, designed to smooth out volatility, was 217,750, a increase of 2500 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 13.1MM BPD.
  • Natural gas storage rose 70BN cubic feet and was above the highest level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs rose 1 to 497 and the number of natural gas rigs were unchanged at 103.
• Factset reported that with 93% of S&P 500 companies reporting, the blended earnings increase so far is 5.7% from a year ago.

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/ppi/home.htm

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

https://www.federalreserve.gov/releases/g17/current/default.htm