Market volatility subsided and stocks rose last week on strong tech earnings and indications that China may be moving to start trade talks with the U.S.  Also boosting sentiment was a stronger than expected April jobs number.  Traders shrugged off a decline in 1^st quarter gross domestic product as the decline was mainly due to a surge in imports before tariff increases.  All market indices had substantial gains with the largest gain in emerging markets.  The S&P 500 ended the week after nine consecutive sessions of gains, the most in two decades.

Treasury bond yields rose with the 30-year bond yield at 4.791% and the 10-Year note at 4.310%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.76%.  Crude oil fell to $58.51 a barrel and natural gas soared to $3.972 per MMBTUs.  The U.S. dollar index fell to 101.05 and gold fell to $3,247.30 an ounce.

In economic reports last week:

• The S&P CoreLogic Case Shiller national home price index rose 0.41% in February and was up 3.88% from last February.
• S&P Global released its manufacturing purchasing manager indices for April.  Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
  • US manufacturing PMI was unchanged at 50.2.
  • Canada manufacturing PMI fell from 46.3 to 45.3.
  • Japan manufacturing PMI rose from 48.4 to 48.7.
  • Eurozone manufacturing PMI rose from 48.6 to 49.0, a 32-month high.
  • As of Friday afternoon, China has not reported its manufacturing PMI.
• Marklines reported that U.S. auto sales were 10.0% higher in April than last April as consumer rushed to beat the automotive tariffs.
• The Commerce Department reported:
  • Gross domestic product fell 0.3% in the first quarter.

• • • The drop was attributed to a surge in imports before tariff increases take effect.

• • Personal consumption expenditures rose 0.7% in March.
    • Spending on motor vehicles and parts surged 56.6%
    • Gasoline and other energy expenditures fell 29.8%.
    • The PCE price index was nearly unchanged for the month but was up 2.3% from a year ago.
      • Excluding volatile food and energy, prices were also nearly unchanged and was up 2.6% year over year.
    • Personal incomes rose 0.5%.
    • The personal savings rate was 3.9%.
  • Construction spending fell 0.5% in March but was 1.2% above March 2024.

• The Labor Department reported:
  • There were 7.2MM job openings in March.
    • There was little change in hires, total separations, and quits.
  • The employment cost index rose 0.9% in the first quarter.  From the first quarter of 2024, employment costs have risen 3.6%.

• • The U.S. added 177,000 jobs in April, beating expectations.
    • The unemployment rate remained at 4.2%.
    • Average hourly earnings rose 0.2% to $36.06.
    • The average work week remained unchanged at 34.3 hours.
  • Seasonally adjusted first-time claims for unemployment were 241,000, an increase of 18,000 from the previous week’s revised level.  
    • The 4-week moving average of claims, designed to smooth out volatility, was 226,000 an increase of 5500 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 13.460MM BPD to 13,465MM BPD.
  • Natural gas storage rose 107BN cubic feet and was about at its average level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs fell 4 to 478 and the number of natural gas rigs rose 2 to 101.
• Factset reported with 72% of S&P 500 companies reporting, the blended earnings increase was 12.8% 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.bea.gov/data/personal-consumption-expenditures-price-index

https://www.bls.gov/eci/

https://www.marklines.com/en/statistics/flash_sales/automotive-sales-in-usa-by-month#:~:text=U.S.%20auto%20sales%20down%202.3,%2C%20Hyundai%20Group%2C%20etc.)

https://www.bls.gov/news.release/archives/empsit_05022025.htm