Major stock indices had substantial gains this week with the largest gain in the Nasdaq 100 and only a modest gain in the Dow Jones 30 Industrials.  Economic data released this week was mixed but jobs growth in June exceeded estimates.  The Federal Reserve released minutes from their June meeting which stated, “Participants affirmed that additional favorable data were required to give them greater confidence that inflation was moving sustainably toward 2 percent,”

Treasury bond yields rose with the 30-year bond yield at 4.496% and the 10-Year note at 4.304%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.95%.  Crude oil rose to $83.83 a barrel and natural gas fell to $2.406 per MMBTUs.  The U.S. dollar index fell to 104.96 and gold rose to $2382.10 an ounce.

In economic reports this week:

• S&P Global released their purchasing manager’s indices for June.  Keep in mind anything over 50 represents expansion and anything under 50 represents contraction.
  • U.S. manufacturing PMI rose from 51.3 to 51.6.
  • U.S. services PMI rose from 54.8 to 55.3.
  • China manufacturing PMI rose from 51.7 to 51.8.
  • China services PMI fell from 54.0 to 51.2.
  • Japan manufacturing PMI fell from 50.4 to 50.0.
  • Japan services PMI fell from 53.8 to 49.4.
  • Eurozone manufacturing PMI fell from 47.3 to 45.8.
  • Eurozone services PMI fell from 53.2 to 52.8.
  • Mexico manufacturing PMI rose from 51.0 to 51.2.
  • Canada manufacturing PMI fell from 49.4 to 49.3.
• The Commerce Department reported:
  • Construction spending in May fell a seasonally adjusted 0.1% from April’s revised level.
    • Private construction spending fell 0.3%.
    • Public construction spending rose 0.5%.

• • The international trade deficit in May grew 0.8% as both imports and exports fell.

• • New orders for manufactured goods fell 0.5% in May after rising 0.4% in April.

• The Labor Department reported:
  • Job openings, hires and separations changed little in May.
  • The U.S. added 206,000 non-farm jobs in June, although April was revised down from 165,000 to 108,000 and May was revised down from 272,000 to 218,000.
    • The unemployment rate ticked up slightly to 4.1%.
    • Long-term unemployed (27 weeks or more) rose 166,000 to 1.5MM, up from 1.1MM a year ago.
    • Average hourly earnings rose 0.3% to $30.05.
    • The average workweek was 34.3 hours.
  • Seasonally adjusted first-time claims for unemployment were 238,000, an increase of 4,000 from the previous week’s revised level.
    • The 4-week moving average of claims, designed to smooth out volatility, was 238,500, an increase of 2,250 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 was unchanged at 13.2MM BPD.
  • Natural gas storage rose 32BN cubic feet and was about at the highest level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs was unchanged at 479 and the number of natural gas rigs rose 4 to 101.

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.bls.gov/news.release/empsit.nr0.htm

https://www.bls.gov/jlt/home.htm