Stocks ended the first half of 2025 and began the second half of 2025 on a strong note.  Economic data came in stronger than expected.  While this dashed hopes for a FED rate cut in July, it still boosted stocks on expectations of growth and rising earnings.  All major indices were higher with the biggest gain in the Russell 2000 small cap index.

Treasury bond yields rose with the 30-year bond yield at 4.865% and the 10-Year note at 4.351%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.67%.  Crude oil rose to $67.19 a barrel and natural gas fell to $3.425 per MMBTUs.  The U.S. dollar index fell to 97.17 and gold rose to $3338.20 an ounce.

In economic reports this week:

• S&P Global released its purchasing managers’ indices for June.  Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
  • U.S. manufacturing PMI rose from 52.0 to 52.9.
  • U.S. services PMI fell from 53.7 to 52.9.
  • Mexico manufacturing PMI fell from 46.7 to 46.3.
  • Canada manufacturing PMI fell from 46.1 to 45.6.
  • Japan manufacturing PMI rose from 49.4 to 50.1.
  • Japan services PMI rose from 51.0 to 51.7.
  • China manufacturing PMI rose from 48.3 to 50.4.
  • China services PMI fell from 51.1 to 50.6.
  • Eurozone manufacturing PMI rose from 49.4 to 49.5.
  • Eurozone services PMI rose from 49.7 to 50.5.
• Marklines reported U.S. auto sales fell a seasonally adjusted 14.4% in the month of June and were down 6.5% from last June
• The Commerce Department reported:
  • Construction spending fell a seasonally adjusted 0.3% in May. And is down 3.5% from a year ago.
    • Private construction fell 0.5%.
    • Public construction rose 0.1%.

• • The trade deficit rose a seasonally adjusted 18.7% in May following a 55% drop in April.
    • Exports fell 4.0%.
    • Imports fell 0.1%.

• • New orders for manufactured goods rose 8.2% in May.

• The Labor Department reported:
  • Job openings increased unexpectedly from 7.4MM in April to 7.8MM in May.
    • Total separations were unchanged for the fifth month in a row of 3.3 percent.
      • Quits were 2.1%.
      • Layoffs were 1.0%.
  • The U.S. added 147,000 jobs in June, much higher than expected.
    • The unemployment rate fell from 4.2% to 4.1%.
    • Net government employment accounted for about half of the job gains.  While federal jobs fell for a fifth straight month, there were strong gains in state and local government employment.
    • The immigrant workforce fell from 33.7MM in March to 32.6MM in June with three straight monthly declines.
    • Average hourly earnings rose 0.2% to $36.30 an hour and were up 3.7% from a year ago.
  • Seasonally adjusted first-time claims for unemployment were 233,000, down 4,000 from the previous week’s revised level.
    • The 4-week moving average of claims, designed to smooth out volatility, were 241,500, a decrease of 3,750 from the previous week’s revised level.
    • Recurring claims were unchanged from the previous week at 1.964MM.
    • 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 fell from 13.435MM BPD to 13.433MM BPD.
  • Natural gas storage rose 55BN 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 7 to 425 and the number of natural gas rigs fell 1 to 108.

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.pmi.spglobal.com/Public/Release/PressReleases

https://www.bls.gov/news.release/jolts.nr0.htm

https://www.marklines.com/en/statistics/flash_sales/automotive-sales-in-usa-by-month#:~:text=U.S.%20auto%20sales%20down%202.3,%2C%20Hyundai%20Group%2C%20etc.)

https://www.bls.gov/news.release/empsit.nr0.htm