Major stock indices ended the week with modest losses.  Markets sold off Tuesday after FED Chair Jerome Powell said, “equity prices are fairly highly valued.”  While Powell left open the possibility of further rate cuts, improving economic and labor data and comments this week from most FED governors decreased the likelihood of a cut at the next meeting.

Treasury bond yields rose with the 30-year bond yield at 4.757% and the 10-Year note at 4.183%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.30%.  Crude oil rose to $65.32 a barrel and natural gas rose to $3.179 per MMBTUs.  The U.S. dollar index rose to 98.15 and gold rose to $3,796.00 an ounce.

In economic reports last week:

• The National Association of Realtors reported that existing home sales fell 0.2% in August but were up 1.8% from a year earlier.  The home sales that closed in August, typically had mortgage rates set in June or July which were much higher.
• The Commerce Department Reported:
  • New home sales surged 20.5% in August as many home builders offered incentives.
  • The inventory of new homes for sale fell 1.4%.
  • The median price of a new home sale rose 4.7% in August and was up 1.9% from August 2024.

• • The third reading of 2^nd quarter gross domestic product was revised up from a 3.3% annual growth rate to 3.8% annual growth rate.  This follows a negative growth rate of 0.6% in the first quarter.

• • Durable goods orders rose 2.9% in August after falling 2.7% in July.  The month-to-month change in durable goods orders has been more than volatile usual this year.

• • Personal consumption expenditures increased 0.6% in August.
    • The PCE price index rose 0.3% or 2.7% from a year ago.
    • The real PCE consumption index, excluding inflation, rose 0.4%.
    • Excluding volatile food and energy PCE prices rose 0.4% and were up 2.9% from last August.  This is the FED’s preferred measure of inflation.
    • Personal incomes rose 0.4% or 0.1% adjusted for inflation.

• The Labor Department reported:
  • Seasonally adjusted first-time claims for unemployment were 218,000, down 14,000 from the previous week’s revised level.
    • The 4-week moving average of claims, designed to smooth out volatility, were 237,500, a decrease of 2,750 from the previous week’s revised level.
    • Recurring claims were 1.926MM down 2,000 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 rose from 13,482MM BPD to 13,501MM BPD.
  • Natural gas storage rose 75BN 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 rose 6 to 424 and the number of natural gas rigs was fell 1 to 117.

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/news.release/ximpim.nr0.htm

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

https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales