Most major stock indices ended the week lower with the exception of the Nasdaq index which eked out a small gain. Lower year over year consumer and producer price increases in April, coupled with increasing layoffs, raised hopes of a FED pause in June. However, fears of an economic slowdown and an impending deadline to raise the federal debt limit weighed on market sentiments.
The Bank of England met and raised the benchmark interest rate from 4.25% to 4.5%. Unlike the U.S. Federal Reserve, which outlined the possibility of a pause in June, the BOE indicated there will likely be more rate hikes.
China is one spot in the world with low inflation due to fragile domestic demand following extended lockdowns from Covid Zero policies.
Treasury bond yields rose with the 30-year bond yield at 3.790% and the 10-Year note at 3.468%. Freddie Mac reported that 30-year mortgage rates fell to 6.35%. Crude oil fell to $70.09 a barrel and natural gas rose to $2.452 per MMBTUs. The U.S. dollar index rose to 102.70 and gold fell to $2015.60 an ounce.
- China reported:
- Exports in April were 8.5% higher than last April. This is down from a 14.8% rise year over year in March and follows declines in October through February.
- Consumer prices were up 0.1% from a year ago in April, down from 0.7% year over year in March.
- Mexico reported that inflation in April was 6.25% from a year ago, down from 6.85% year over year in March.
- The Labor Department reported:
- The Consumer Price Index rose 0.4% in April, up from 0.1% increase in March.
- From a year ago, the index has risen 4.9%, down from 5.0% year over year in March.
- Excluding volatile food and energy, core prices also rose 0.4% in April, the same as March.
- Food prices were unchanged in April while gasoline rose 3.0%.
- Used cars and truck prices rose 4.4% while new car prices fell 0.2%.
- The Consumer Price Index rose 0.4% in April, up from 0.1% increase in March.
Source: Bureau of Labor Statistics
Source: Bureau of Labor Statistics
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- The Producer Price Index rose 0.2% in April and was up 2.3% from last April
- Excluding volatile food and energy, producer prices also rose 0.2% and were up 3.4% from a year ago.
- Goods prices rose 0.2% while services rose 0.3%.
- Seasonally adjusted first-time claims for unemployment were 264,000 up from 242,000 in the prior week..
- The 4-week moving average of claims, designed to smooth out volatility, was 245,250 up from 239,250 in the prior week.
- The Producer Price Index rose 0.2% in April and was up 2.3% from last April
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- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
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- 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 was unchanged at 12.3MM BPD.
- Natural gas storage rose 78BN cubic feet and is above the 5-year average at this time of year.
- Baker Hughes reported the number of active oil rigs fell 2 to 586. The number of active natural gas rigs fell 16 to 141.
- Factset reported that with 92% of S&P 500 companies reporting earnings, the blended earnings decrease was 2.5% from a year ago.
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.factset.com/earningsinsight
https://www.wsj.com/market-data?mod=nav_top_subsection
