Major stock indices ended the week with modest gains following stronger than expected gross domestic product and smaller increases in the PCE price index.  The first reading of gross domestic product accelerated in the second quarter and core PCE inflation fell to 4.1% year over year.

The Federal Reserve met and raised short term interest rates by 0.25% to a range of 5.25% to 5.5%.  The FED also left the door open to further rate hikes.  The European Central Bank raised its benchmark rate 0.25 to 4.25%.  The Bank of Japan met and kept its benchmark short term rate and the 10 year bond unchanged.

Treasury bond yields rose with the 30-year bond yield at 4.013% and the 10-Year note at 3.954%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.81%.  Crude oil rose to $80.58 a barrel and natural gas fell to $2.638 per MMBTUs.  The U.S. dollar index rose to 101.65 and gold fell to $1958.30 an ounce.

• The S&P Global Case Shiller National Home Price Index rose 1.2% in May but was down 0.5% from a year ago.
• The International Monetary Fund raised its forecast for global 2023 growth from 2.8% to 3.0% citing stability in the U.S. economy.
• The Commerce Department reported
  • The first estimate of 2^nd quarter GDP grew at a 2.4% rate, up from the third reading of 1^st quarter GDP at 2.0%.

• • The personal consumption expenditures (PCE) price index rose 0.2% in June.  From a year ago the PCE index rose 3.0%, down from 3.8% year over year in May.
    • Excluding volatile food and energy the PCE also rose 0.2% in June but is up 4.1% from a year ago.  That is down from 4.6% year over year in May.
    • The core PCE price index is the FED’s preferred measure of inflation.
  • Personal incomes rose 0.3% in current dollars.
  • Personal consumption expenditures rose 0.5% in June in current dollars.
  • Personal savings rose to 4.4% of disposable personal income, up from 4.3% in May.

• The Labor Department reported:
  • Employment costs rose 1.0% for the 2^nd quarter and 4.5% from a year ago.
  • Seasonally adjusted first-time claims for unemployment were 221,000, a decrease of 8,000 from the previous week’s level.
    • The 4-week moving average of claims, designed to smooth out volatility, were 233,750 a decrease of 3,750 from the previous week’s 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 fell from 12.3MM BPD to 12.2MM BPD.
  • Natural gas storage rose 16BN cubic feet and is above the 5-year average at this time of year.
• Baker Hughes reported the number of active oil rigs fell  to 529.  The number of active natural gas rose 3 to 128.
• Factset reported with 51% of S&P 500 companies reporting 2^nd quarter earnings, the blended earnings decline was 7.3%.

Please call us if you have any questions.

Loren C. Rex, CFP^®, MA                                                                      Erik A Smith, AIF®

Founder / Emeritus                                                                            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.

 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.factset.com/earningsinsight

https://www150.statcan.gc.ca/n1/daily-quotidien/230718/dq230718a-eng.htm

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

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

https://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html

https://www.bea.gov/data/personal-consumption-expenditures-price-index