What I’m Watching This Week – 28 May 2019

The Markets (as of market close May 24, 2019)

With last week’s loss, the Dow suffered its longest weekly losing streak since 2011. Trade tensions between the United States and China seem to be taking a toll on investors’ patience. Each of the benchmark indexes listed here also posted weekly losses. Money moved to bonds, pushing prices higher and yields lower. Tech stocks were particularly hard-hit last week, as were energy stocks. Year-to-date, each of the benchmarks are still comfortably ahead of their 2018 closing values, but the gap is narrowing for some indexes, particularly the Global Dow and the Dow, which are now less than 10% ahead of their respective year-end closing marks.

Oil prices fell last week, closing at $59.04 per barrel by late Friday, down from the prior week’s closing price of $62.71 per barrel. The price of gold (COMEX) jumped last week, closing at $1,284.20 by Friday evening, up from the prior week’s price of $1,277.40. The national average retail regular gasoline price was $2.852 per gallon on May 20, 2019, $0.014 lower than the prior week’s price and $0.071 less than a year ago.

Market/Index 2018 Close Prior Week As of 5/24 Weekly Change YTD Change
DJIA 23327.46 25764.00 25585.69 -0.69% 9.68%
Nasdaq 6635.28 7816.28 7637.01 -2.29% 15.10%
S&P 500 2506.85 2859.53 2826.06 -1.17% 12.73%
Russell 2000 1348.56 1535.76 1514.11 -1.41% 12.28%
Global Dow 2736.74 2977.45 2951.46 -0.87% 7.85%
Fed. Funds target rate 2.25%-2.50% 2.25%-2.50% 2.25%-2.50% 0 bps 0 bps
10-year Treasuries 2.68% 2.46% 2.37% -9 bps -31 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

  • Sales of existing homes continued to lag in April. According to the National Association of Realtors®, existing home sales fell 0.4% from their March total and are down 4.4% from a year ago. The median existing-home price for all housing types in April was $267,300, up from the prior month’s price ($259,400) and ahead of the median price from a year ago ($257,900). Total housing inventory increased from 1.67 million in March to 1.83 million in April. First-time buyers were responsible for 32% of sales in April, down from the 33% reported last month and one year ago. Sales for single-family existing homes fell about 1.1% in April and are down 4.0% from April 2018. The median existing single-family home price was $269,300 in April, up 3.7% from April 2018.
  • Sales of new single-family homes had been fairly strong through the first quarter of the year. However, April’s totals are definitely lagging. New home sales dipped 6.9% below March’s totals, although they’re 7.0% above sales from a year ago. The median sales price of new houses sold in April was $342,200 ($305,800 in March). The average sales price was $393,700 ($372,300 in March). There were about 332,000 new homes for sale in April, representing a supply of 5.9 months (5.6-month supply in March).
  • New orders for long-lasting goods fell 2.1% in April, after climbing 1.7% in March. Transportation equipment (primarily commercial aircraft and cars), down two of the last three months, drove the decrease, falling 5.9%. Shipments of manufactured durable goods in April, down three of the last four months, decreased 1.6%. Not surprisingly, inventories increased 0.4% in April.
  • According to the Department of Labor, there were 211,000 claims for unemployment insurance for the week ended May 18, a decrease of 1,000 from the previous week’s level. The advance rate for insured unemployment claims remained at 1.2% for the week ended May 11. The advance number of those receiving unemployment insurance benefits during the week ended May 11 was 1,676,000, an increase of 12,000 from the prior week’s level, which was revised up by 4,000.

Eye on the Week Ahead

The second estimate of the first-quarter gross domestic product is available this week. The advance estimate, released last month, showed the economy grew at an annualized rate of 3.2%. It is expected that the latest estimate will closely mirror the initial report.

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