Major U.S. stock indices and developed international stocks ended the holiday shortened week with modest gains while emerging markets ended lower.  The S&P500 had its best May since 1990.  Stocks rose Tuesday following President Trump delaying the threatened EU sanctions from June 1^st to July 9^th to provide more time for negotiations.  Late Wednesday, the U.S. Tariff Court of International Trade ruled that the administration wrongly invoked the International Emergency Economic Powers Act of 1977.  This blocked the so called “Liberation Day” tariffs and previous 2025 tariffs on Canada, Mexico and China but left intact China tariffs from Trump’s first term and new tariffs on various sectors like steel or automobiles.  However, by early Thursday morning a federal appeals court temporarily paused the Tariff Court’s ruling pending arguments from both sides by June 9^th.  The administration said they might seek “emergency relief”, from the Supreme Court.

The Federal Reserve released minutes from the May 6-7 meeting.  They stressed using a “cautious approach” to navigate the risks of higher inflation and weaker growth.  They cited tariff hikes as a source of higher inflation. This led traders to assume that rate cuts will not be coming soon.  Fed Chair Jerome Powell said in his news conference after the meeting that the risk of waiting is “fairly low.”

Treasury bond yields fell with the 30-year bond yield at 4.959% and the 10-Year note at 4.458%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.89%.  Crude oil fell to $60.65 a barrel and natural gas fell to $3.540 per MMBTUs.  The U.S. dollar index rose to 99.43 and gold fell to $3339.70 an ounce.

In economic reports last week:

• S&P Global reported that U.S. home prices rose 0.76% in March and were up 3.4% from last March.
• The Commerce Department reported:
  • The first quarter’s GDP was revised to a decline of 0.1%, up from the first estimate of a 0.2% decline.
    • The decline was attributed to increased imports (which are subtracted from GDP) in anticipation of tariff increases.

• • Personal consumption expenditures rose a seasonally adjusted 0.2% in April.
    • The personal consumption price index rose 0.1%.
      • From a year ago the PCE price index has risen 2.1%.
      • Excluding volatile food and energy prices also rose 0.1% and were up 2.5%.
    • Personal incomes rose 0.8% in April.
    • The personal savings rate was 4.9%.
• The Labor Department reported:
  • Seasonally adjusted first-time claims for unemployment were 240,000, an increase of 14,000 from the previous week’s revised level.  
    • The 4-week moving average of claims, designed to smooth out volatility, was 230,750 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: Weekly Petroleum Status Report.  Also, the EIA reported in the prior week:
  • Field production of crude oil rose from 13.392MM BPD to 13.401MM BPD.
  • Natural gas storage rose 101BN 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 4 to 461 and the number of natural gas rigs rose 1 to 99.
• Factset reported with 98% of S&P 500 companies reporting, the blended earnings increase was 13.3% from a year ago.

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.spglobal.com/spdji/en/index-family/indicators/sp-corelogic-case-shiller/sp-corelogic-case-shiller-composite/#overview

https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_053025A.pdf