Most major stock indices ended the week with gains. The largest gain was in Developed International, the Dow Jones 30 Industrials ended nearly unchanged.
Sometimes bad news is good news in the markets and stocks rallied on Monday on anticipation that the FED will cut rates sooner due to weak employment numbers. The FED’s next move will depend on incoming inflation and jobs data between now and their next meeting on September 16-18.
Several mega cap tech stocks had large upsides after earnings announcements last week.
Stocks slid on Thursday largely due to the implementation of a large tranche of tariffs. Stocks rose on Friday largely due to hopes for a truce in the Ukraine war and the large number of microchip exemptions for import tariffs if companies are building plants in the U.S.
While the July’s S&P Global purchasing manager’s indices contracted among the largest economies, their services PMIs all expanded. There are two different companies providing PMI indices. We report S&P Global as it includes more companies and a mix of large, medium and small companies. Whereas ISM is skewed towards large companies and includes government. Having said that, ISM services were weaker this month as opposed to the S&P Global data which was stronger.
OPEC+ decided to increase production by 547,000 barrels per day in September as the possibility of sanctions on Russian oil exports raised supply concerns.
The Bank of England met and chose to cut its benchmark interest rate 0.25% to 4.0%. The BOE decided to make this cut despite expectations that inflation will rise to 4% in September. The decision required a second round of voting for the first time in the BOE’s history as members weighed a weakening jobs market against an expected rise in inflation.
Treasury bond yields rose with the 30-year bond yield at 4.862% and the 10-Year note at 4.291%. Freddie Mac reported that the average 30-year mortgage rate fell to 6.63%. Crude oil fell to $63.63 a barrel and natural gas fell to $2.998 per MMBTUs. The U.S. dollar index fell to 98.21 and gold fell to $3454.30 an ounce.
In economic reports last week:
- The S&P CoreLogic Case-Shiller national home price index rose 0.45% in May and was up 2.25% from last May.
- S&P Global released its services purchasing manager’s indices for July. Keep in mind that anything over 50 represents expansion while anything under 50 represents contraction.
- U.S. services PMI rose from 52.9 to 55.7.
- Japan services PMI rose from 51.7 to 53.6.
- China services PMI rose from 50.6 to 52.6.
- Eurozone services PMI rose from 50.5 to 51.0.
- Canada services PMI rose from 44.3 to 49.3.
- Marklines reported that U.S. auto sales rose 7.5% in July. However, a cyber-attack affecting dealership management systems caused June sales to be delayed until July and August. July sales were down 14% from March which was the peak of buyers trying to beat auto tariffs.
- Auto sales were down 8.7% in July.
- Light truck sales were up 11.3% in July. Keep in mind that all SUVs and minivans are counted as light trucks.
- The Commerce Department Reported:
- New orders for manufactured goods fell 4.8% in June. New orders have fluctuated wildly on changing tariff rates.
- New orders for manufactured goods fell 4.8% in June. New orders have fluctuated wildly on changing tariff rates.
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- The trade deficit fell 16.0% in June.
- Imports fell 3.7%.
- Exports fell 0.5%.
- The trade deficit fell 16.0% in June.
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- Seasonally adjusted wholesale inventories rose 0.1% in June.
- Seasonally adjusted wholesale inventories rose 0.1% in June.
- The Labor Department reported:
- Nonfarm business sector labor productivity rose 2.4% in the second quarter.
- Output increased 3.7%.
- Hours worked increased 1.3%.
- Unit labor costs rose 1.6%.
- Seasonally adjusted first-time claims for unemployment were 226,000, up 7,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, were 220,750, a decrease of 250 from the previous week’s revised level.
- Recurring claims were 1.974MM an increase of 38,000 from the previous week’s revised level.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf
- Nonfarm business sector labor productivity rose 2.4% in the second quarter.
- The EIA weekly oil report is here: Weekly Petroleum Status Report. Also, the EIA reported in the prior week:
- Field production of crude oil fell from 13.314MM BPD to 13.284MM BPD..
- Natural gas storage rose 7BN 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 409 and the number of natural gas rigs fell 1 to 123.
- Factset reported with 90% of S&P 500 companies reporting 2nd quarter earnings, that the blended earnings increase was 11.8%.
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.bea.gov/sites/default/files/2025-07/pi0625.pdf
