Blog Post

Stocks Mixed with Technology Bright Spot

Major stock indices were mixed this week with the best performance in the tech heavy Nasdaq Composite Index.  While core inflation from a year ago came in slightly lower than last month, the month of January came in higher that December.  While most economists are predicting Federal Reserve rate cuts later this year, a few are now predicting no rate cuts in 2024.

Treasury bond yields fell with the 30-year bond yield at 4.328% and the 10-Year note at 4.129%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.94%.  Crude oil rose to $79.73 a barrel and natural gas rose to $1.836 per MMBTUs.  The U.S. dollar index fell to 103.91 and gold rose to $2092.40 an ounce.

  • S&P Global released its purchasing manager’s indices for February:
    • U.S. manufacturing PMI rose from 50.7 to 52.2.
    • Canada manufacturing PMI rose from 48.3 to 49.7.
    • Mexico manufacturing PMI rose from 50.2 to 52.3.
    • Eurozone manufacturing PMI fell from 46.6 to 46.5.
    • China manufacturing rose from 50.8 to 50.9.
    • Japan manufacturing fell from 48.0 to 47.2.
  • The Commerce Department:
    • Revised 4th quarter gross domestic product to 3.2%, down from the initially estimated 3.3%.
      • Private inventory investment was revised downward while state and local government spending and consumer spending was revised upward.
    • The personal consumption price index rose 0.3%. 
      • Goods prices decreased 0.2%.
      • Services increased 0.6% led by housing and utilities.
      • From a year ago PCE prices rose 2.4%.
      • Core PCE prices, excluding volatile food and energy, were up 0.4% in January up from 0.1% in December.
        • From a year ago core prices were up 2.8% from a year ago, down from 2.9% year over year in December. 
        • This is the FED’s preferred measure of inflation.
        • The largest increases in core PCE was due to housing and utilities.
    • Personal income rose 1.0% in January, largely affected by the annual increase in Social Security benefits.
    • Personal consumption expenditures rose 0.2% in January.
      • After inflation, PCE expenditures fell 0.1%.
  • The Labor Department reported:
    • Seasonally adjusted first-time claims for unemployment were 215,000 an increase from the previous week’s revised level of 202,000.
      • The 4-week moving average of claims, designed to smooth out volatility, was 212,250, an decrease of 3,000 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: http://ir.eia.gov/wpsr/wpsrsummary.pdf .  Also, the EIA reported in the prior week:
    • Field production of crude oil was unchanged at 13.3MM BPD.
    • Natural gas storage fell 96BN cubic feet and was above the highest level during the past five years at this time of year.
  • Baker Hughes reported the number of oil rigs rose 3 to 506 and the number of natural gas rigs fell 1 to 119.

Please call us if you have any questions.

Loren Rex – Emeritus

Erik A Smith, AIF® – 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. 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/news/2024/personal-income-and-outlays-january-2024

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