Blog Post

Stocks Rise on Stronger Than Expected Gross Domestic Product and Falling Inflation.

Major stock indices had substantial gains as positive news on inflation, durable goods orders and upwardly revised 1st quarter GDP encouraged traders.

In an interview, FED chair Jerome Powell said he doesn’t expect inflation to fall to 2% until 2025.  He said the FED could go back to hiking rates at each meeting if needed.  Powell also said the FED’s base case is for the U.S. to avoid a recession.  On Friday the Personal Consumption Expenditures price index, the FED’s preferred measure of inflation, showed inflation continues to come down but has a ways to go to hit the FED’s 2% target.

Treasury bond yields rose with the 30-year bond yield at 3.857%and the 10-Year note at 3.823%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.71%.  Crude oil rose to $70.54 a barrel and natural gas rose to $2.767 per MMBTUs.  The U.S. dollar index rose to 102.92 and gold fell to $1926.90 an ounce.

  • The S&P CoreLogic Case-Shiller National Home Price Index rose 0.5% in April. 
    • From a year earlier, the index fell 0.2%, the first year over year decline since 2012.
  • The Commerce Department reported:
    • Durable goods orders rose 1.7% in May.  April was revised to a 1.2% gain.
      • Excluding transportation, new orders increased 0.6 percent.
      • Excluding defense, new orders increased 3.0 percent.
      • Transportation equipment, also up three consecutive months, led the increase by rising 3.9 percent.


    • New home sales rose a seasonally adjusted 12.2% in May.
      • The median sales price of a new home was $416,300.
    • The second revision to 1st quarter gross domestic product revised the previous 1.3% annual rate of growth to 2% as more data became available.
      • Gross domestic income was revised from -2.3% to -1.8%.
      • Consumer spending was revised from 3.8% to 4.2%.
      • Exports were revised from 5.2% to 7.8%.
    • Personal consumption expenditures rose 0.1% in May.
    • The PCE price index rose 0.1% showing flat consumption after adjusting for inflation.
    • Excluding volatile food and energy the PCE price index rose 0.3% in May.
      • From a year earlier the PCE price index rose 3.8% in May, down from 4.3% in April.
      • Excluding food and energy, the PCE price index rose 4.6% from a year ago in May, down from 4.7% in April.
    • Personal income rose 0.4% in May.
  • The Labor Department reported:
    • Seasonally adjusted first-time claims for unemployment were 239,000, down 26,000 from the previous week’s revised level.
      • The 4-week moving average of claims, designed to smooth out volatility, were 257,500 an increase of 1500 from the previous week’s revised level. 
  • The EIA weekly oil report is here: .  Also, the EIA reported in the prior week:
    • Field production of crude oil was unchanged at 12.2MM BPD.
    • Natural gas storage rose 76BN cubic feet and is above the 5-year average at this time of year.
  • Baker Hughes reported the number of active oil rigs fell 1 to 545.  The number of active natural gas fell 6 to 124.

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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.



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