Stocks were mixed this week as the market’s attempts to rally were foiled by May’s weak jobs number reported on Friday. I believe that a FED increase in June is unlikely due to the weak jobs number and the potential British exit from the European Union. Treasury prices rose as yields fell. Commodity prices were mixed and the dollar was lower against major currencies.
In economic news this week
- The Labor Department reported:
- First time claims for unemployment fell 1.000 to 267,000 in the prior week. The four week moving average of claims fell by 1,750 to 276,750.
- Only 38,000 jobs were created in May, the weakest monthly job gain since September 2010. While these numbers were affected by 35,000 striking Verizon workers, without that the jobs number would only be 73,000 which is considered weak. However, the strike ended June 1 and should provide some boost to the June employment numbers.
- The unemployment rate fell to 4.7% from 5.0%. This was attributed mostly to a large decline in labor force participation.
- The U.S. Energy Information Administration reported
- Crude oil inventories fell 1.4MM barrels last week.
- Gasoline inventories fell 1.5MM barrels last week.
- The Commerce Department reported:
- Personal spending rose 1.0% in April the biggest jump since August 2009.
- Personal income rose 0.4%.
- The personal savings rate fell from 5.9% in March to 5.4% in April.
- The personal consumption expenditures price index (the FED’s preferred measure of inflation) rose 0.3% in April. From a year earlier the index has risen 1.1%. Core prices, excluding volatile food and energy rose 0.2% in April and 1.6% from a year ago.
- The S&P Case-Shiller Home Price Index rose 5.2% year over year in March, less than the 5.3% y-o-y increase in February.
- The China Caixin manufacturing purchasing managers’ index declined to 49.2 in May from 49.4 in April indicating that the pace of contraction in China is accelerating.
- Baker Hughes reported that the number of oil rigs increased by 9 this past week to 325, the first increase in 11 weeks. Gas rigs fell by five to 82. Offshore rigs fell 3 to 21.
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Loren C. Rex, CFP®, AIF® Erik Smith
Generations Financial Planning & Wealth Management 269-441-4143
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Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
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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.