Stocks ended the week substantially higher on better economic news despite an increase in U.S. Covid cases and additional state restrictions.
Stocks rallied on Monday after the National Association of Realtors reported a sharp increase in pending home sales.
Stocks had modest gains on Tuesday to finish the month, the quarter and the first half of the year.
Stocks continued to rise on Wednesday due to manufacturing PMI’s showing much slower contractions in most of the world and modest growth in China.
Thursday’s surprisingly strong jobs report boosted stocks further in this holiday shortened week.
Treasury yields rose with the 30-year bond ending at 1.432% and the 10-Year note at 0.673%. Crude oil rose to $40.30 a barrel and natural gas rose to $1.721 per MMBTUs. The U.S. dollar index ended the week higher and gold prices rose to $1787.70 an ounce.
In the economic numbers this week:
- The National Association of Realtors reported that pending home sales rose 44.3% in May after falling 99.6% in April. Based on these numbers they are forecasting 4.93MM home sales for calendar year 2020, down from 5.3MM in 2019.
- The European Union’s Statistics Office reported that consumer prices rose 0.3% year over year in June, up from 0.1% in May. Core prices, excluding volatile food and energy, rose 1.1% year over year.
- IHS Markit released its survey of purchasing managers and reported the following PMIs. Keep in mind that anything below 50 represents contraction and anything over 50 represents expansion:
- US manufacturing was 49.8 in June up from 39.8 in May.
- Eurozone manufacturing was 49.4 in June up from 39.4 in May.
- China was 51.2 in June up from 50.7 in May.
- Japan was 40.1 in June up from 38.4 in May.
- The Commerce Department reported, the U.S. trade deficit grew as both exports and imports fell. Exports hit their lowest level since August 2009 due to weak global demand.
- The Labor Department reported:
- 1.43MM workers filed initial unemployment claims last week, down from 1.48MM in the prior week.
- However, many more people returned to work than were laid off in June with 4.8MM jobs added. The unemployment rate fell to 11.1%
- The EIA weekly oil report is here wpsrsummary. Also, the EIA reported in the past week:
- Field production of crude oil was unchanged at 11.0MM barrels per day. The peak production at the end of February was 13.1MM barrels per day.
- Natural gas storage rose by 65BN cubic feet and is above the five year average at this time of year.
- Baker Hughes reported the number of active oil rigs fell 3 to 185 and the number of active natural gas rigs increased 1 to 76.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik A Smith AIF®
President Managing Partner
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
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.