Stocks rose Tuesday on a better-than-expected consumer price increase, although core prices, excluding food and energy, accelerated in July. Stocks fell on Thursday on higher-than-expected producer price increases, but major indices ended the week with gains. The small cap Russell 2000 had the largest gains for the week.
Treasury bond yields rose with the 30-year bond yield at 4.926% and the 10-Year note at 4.323%. Freddie Mac reported that the average 30-year mortgage rate fell to 6.58%. Crude oil fell to $63.13 a barrel and natural gas fell to $2.916 per MMBTUs. The U.S. dollar index fell to 97.85 and gold fell to $3384.10 an ounce.
In economic reports this week:
- The Treasury Department released its monthly budget report. In July, the deficit was $291BN. For the fiscal year beginning in October, the deficit was $1.629TN.
Source: The Treasury Department
- The Federal Reserve reported that industrial production fell 0.1% in July.
- Manufacturing was unchanged.
- Mining, including oil and gas production fell 0.4%.
- Utilities fell 0.2%.
- The Commerce Department Reported:
- Retail sales rose a seasonally adjusted 0.5% in July following a revised 0.9% increase in June. Retail sales are not adjusted for inflation.
- Retail sales rose a seasonally adjusted 0.5% in July following a revised 0.9% increase in June. Retail sales are not adjusted for inflation.
- The Labor Department reported:
- The consumer price index, seasonally adjusted, rose 0.2% in July and was up 2.7% from a year ago.
- Shelter rose 0.2% and was responsible for most of the increase.
- Food was unchanged.
- Energy fell 1.1%.
- Excluding food and energy prices rose 0.3% and were up 3.1% year over year.
- The producer price index, seasonally adjusted, rose 0.9% in July, and was up 3.3% over 12 months.
- Goods prices rose 0.7%.
- Services prices rose 1.1%.
- Excluding volatile food and energy, prices rose 0.6% and was up 2.8% year over year.
- Final demand trade services rose 2.0%.
- Import prices rose 0.4% in July and were down 0.2% from a year earlier.
- The consumer price index, seasonally adjusted, rose 0.2% in July and was up 2.7% from a year ago.
Source: Department of Labor
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- Seasonally adjusted first-time claims for unemployment were 224,000, down 3,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, were 221,750, an increase of 750 from the previous week’s revised level.
- Recurring claims were 1.953MM a decrease of 15,000 from the previous week’s revised level.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf
- Seasonally adjusted first-time claims for unemployment were 224,000, down 3,000 from the previous week’s revised level.
- 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 13.284MM BPD to 13.327MM BDP.
- Natural gas storage rose 56BN 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 1 to 410 and the number of natural gas rigs fell 1 to 122.
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/cpi.nr0.htm
https://www.fiscal.treasury.gov/files/reports-statements/mts/mts0725.pdf
https://www.bls.gov/news.release/ppi.nr0.htm
