Major stock indices rebounded substantially this week with the biggest gains in the Nasdaq 100, following strong earnings from several large tech companies.  The markets ignored concerns that the gross domestic product growth slowed down significantly in the first quarter and inflation picked up in March.  Although, employment and spending remain strong.

Treasury bond yields rose with the 30-year bond yield at 4.775% and the 10-Year note at 4.663%.  Freddie Mac reported that the average 30-year mortgage rate rose to 7.17%.  Crude oil rose to $84.29 a barrel and natural gas rose to $1.928 per MMBTUs.  The U.S. dollar index rose to 105.82 and gold fell to $2356.90 an ounce.

In economic reports this week:

• The Commerce Department reported:
  • New home sales rose 8.8% in March versus February and were up 8.3% from a year ago.
    • New home sales represent a small portion of the total home sales which were down in March.
    • The median sales price of a new home was $430,700.

• • The initial reading of U.S. gross domestic product grew at a 1.6% annualized rate in the first quarter, down sharply from the 3.4% rate in the fourth quarter of 2023.
    • Consumer spending and housing investment grew.
    • Inventory investment fell.
    • Imports, which are a subtraction in the calculation of GDP, increased.
    • The price index for gross domestic purchases increased at a 3.1% annual rate in the first quarter, compared with an increase of 1.9% annual rate in the fourth quarter.
    • Disposable incomes grew at a 4.5% annual rate in the first quarter, up from 3.8% in the fourth quarter.
    • 

• • The personal consumption price index rose 0.3% in March and 2.7% from a year ago.
    • This is up from 2.5% year over year in February.
    • Excluding volatile food and energy, prices also rose 0.3% and were up 2.8% from a year ago.  This is the FED’s preferred measure of inflation.
    • Spending rose 0.8% in March and 0.5% after inflation.
      • Good spending rose 1.1%.
      • Services spending rose 0.2%.
    • Incomes rose 0.5% in March, or 0.2% after inflation.
• The Labor Department reported:
  • Seasonally adjusted first-time claims for unemployment were 207,000, a decrease of 5,000 from the previous week’s revised level.
    • The 4-week moving average of claims, designed to smooth out volatility, was 213,250, a decrease of 1,250 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 13.1MM BPD.
  • Natural gas storage rose 92BN 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 fell 5 to 506 and the number of natural gas rigs fell 1 to 105.
• Factset reported that with 46% of S&P 500 companies reporting, the blended earnings increase so far is 3.5% from a year ago.

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.federalreserve.gov/releases/g17/current/default.htm

https://www.imf.org/en/Home

https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales

https://insight.factset.com/topic/earnings

https://www.bea.gov/data/gdp/gross-domestic-product