Major stock indices posted their best week of 2024 as traders gained confidence in the U.S. economy.  The NASDAQ 100 index had the biggest gain.  Both producer and consumer price gains continue to ease.  Layoffs eased.  Retail sales surged in July.  While housing starts fell, this likely was depressed by Hurricane Beryl.

Treasury bond yields fell with the 30-year bond yield at 4.155% and the 10-Year note at 3.910%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.49%.  Crude oil fell to $76.32 a barrel and natural gas fell to $2.152 per MMBTUs.  The U.S. dollar index fell to 102.79 and gold rose to $2524.30 an ounce.

In economic reports this week:

• The Treasury Department reported that in July, receipts were $330BN outlays were $574BN for a deficit of $244BN.
  • For fiscal year 2024 receipts were $4085BN, outlays were $5602BN and the deficit was $1517BN.
• The Commerce Department reported:
  • The advance estimate of retail sales rose a seasonally adjusted 1.0% in July after falling 0.1% in June.

• Housing starts fell a seasonally adjusted 6.8% in July from the revised June level and 16% below July 2023.
  • Permits, an indication of future housing starts, fell 4.0% in July and are down 7.0% from July 2023.

• The Labor department reported:
  • The producer price index rose a seasonally adjusted 0.1% in July.
    • Excluding food, energy, and trade services the PPI rose 0.3%.
    • Goods PPI rose 0.6%.
    • Services PPI fell 0.2%.

• • The consumer price index rose 0.2% in July after falling 0.1% in June and was flat in May.
    • Excluding volatile food and energy, the CPI also rose 0.2%.
    • From a year ago, the CPI has risen 2.9% and 3.2% excluding food and energy.
      • In June shelter costs rose 0.4%.
      • Natural gas fell 0.7%.

• • Seasonally adjusted first-time claims for unemployment were 227,000, a decrease of 7,000 from the previous week’s revised level.
    • The 4-week moving average of claims, designed to smooth out volatility, was 236,500, a decrease of 4500 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 was fell from 13.4MM BPD to 13.3MM BPD, a new record.
  • Natural gas storage fell 6BN cubic feet and is near the highest level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs fell 2 to 483 and the number of natural gas rigs rose 1 to 98.
• Earnings Insight reported with 93% of the S&P 500 reporting, the blended earnings increase was 10.9%.

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