Stocks soared on Monday over the announcement on trade progress with China.  The U.S. and China will slash tariffs for 90 days to continue talks and finalize a plan.  Stocks continued to rise for the week with all major indices posting substantial gains. The tech heavy Nasdaq 100 Index had the largest gain.

The consumer price index picked up in April from March’s unexpected contraction.  The impact of tariffs was minimized by many imported items at the retail level being imported before the tariffs were hiked.

Treasury bond yields rose with the 30-year bond yield at 4.938% and the 10-Year note at 4.478%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.81%.  Crude oil rose to $61.52 a barrel and natural gas fell to $3.769 per MMBTUs.  The U.S. dollar index rose to 100.93 and gold fell to $3206.00 an ounce.

In economic reports last week:

• The Treasury Department reported that the U.S. had a budget surplus in the month of April, largely due to a spike in income tax revenue from the April filing deadline.
  • Since the beginning of the fiscal year in October, the federal deficit was $1.49TN.

                Source: U.S. Treasury Department

• The Commerce Department reported:
  • Housing starts rose a seasonally adjusted 1.6% in April but were down 1.7% from last April.
    • Single family housing starts fell 2.1% and were down 12.0% from last April.
    • Multi-family housing starts rose 37.5% and were up 35.1% from last April.
    • Permits, a sign of future housing starts fell 4.7% and were down 3.2% from last April.
• The Labor Department reported:
  • The consumer price index rose 0.2% in April after falling 0.1% in March.  Over the past 12 months, the CPI index has risen 2.3%. down from 2.4% year over year in March.
    • Excluding volatile food and energy the CPI also rose 0.2% and was up 2.8% year over year.
      • Energy rose 0.7%.
      • Food fell 0.1%.
      • Shelter rose 0.3%.

                                Source: U.S. Department of Labor

• • The producer price index for final demand fell a seasonally adjusted 0.5% in April following no change in March.
    • From 12 months ago, the producer price index rose 2.4%.
    • Excluding volatile food, energy and trade services the PPI fell 0.1%, the first decline since April 2020.
      • Year over year, this core PPI rose 2.9%.
    • Goods prices for final demand were unchanged.
    • Services prices for final demand fell 0.7% in April, the largest decline since the index started in December 2009.
      • The decline in services was attributed mainly to smaller margins for machinery and vehicle wholesaling, which declined 6.1%.

                Source: U.S. Department of Labor

• • Import prices rose 0.1% in April following a 0.4% decline in March.
    • Prices for imported fuel fell 2.6% following a 3.4% decrease in March, largely offsetting increases in other imports.
    • Prices for imports other than fuel rose 0.4% in April and were up 1.2% from a year ago.

                Source: U.S. Department of Labor

• • Seasonally adjusted first-time claims for unemployment were 229,000, unchanged from the previous week’s revised level.  
    • The 4-week moving average of claims, designed to smooth out volatility, was 230,500 an increase of 3250 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: Weekly Petroleum Status Report.  Also, the EIA reported in the prior week:
  • Field production of crude oil rose from 13.367MM BPD to 13.387MM BPD.
  • Natural gas storage rose 110BN cubic feet and was above its average level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs fell 1 to 473 and the number of natural gas rigs fell 1 to 100.
• Factset reported with 92% of S&P 500 companies reporting, the blended earnings increase was 13.6% from a year ago.

Please call us if you have any questions.

Loren Rex – Emeritus

Erik A Smith, AIF® – President & C.E.O.

Nicholas Acri, CFP® – Partner & Wealth Advisor

Dylan Thomas, CFP® – Partner & Wealth Advisor

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.bls.gov/news.release/pdf/cpi.pdf

https://www.bls.gov/news.release/pdf/ximpim.pdf