Monthly Market Review – July 2020

The Markets (as of market close July 31, 2020)

Stocks posted gains in July in spite of gloomy news on the economic and pandemic fronts. Investors continued to trust equities despite the gross domestic product falling nearly 33.0% in the second quarter, mixed quarterly corporate earnings results, emerging pandemic hot spots, growing unemployment claims, and ongoing turmoil between the United States and China.

On the positive side, 4.8 million new jobs were added in June, the housing sector surged, and industrial production continued to rebound. Investors also may be hoping that more financial stimulus is in the offing. Energy stocks, which had plunged in May, rebounded in June and continued to keep pace in July.

The COVID-19 pandemic continues to dominate nearly every aspect of life. Some states are seeing the number of reported cases soar and have considered (and, in a few cases, enacted) partial lockdowns. Throughout July, several companies made announcements of progress toward either treatment or a vaccine. States and local communities struggle with plans to get students back to school.

Through it all, investors stayed with stocks, pushing them to their fourth consecutive month-over-month gain. The big winners in July were the Nasdaq and the S&P 500. The Global Dow advanced 3.5%, followed by the Russell 2000 and the Dow.

Year to date, the Nasdaq and the S&P 500 are ahead of their respective 2019 closing values. The next closest is the Dow, which remains more than 7.0% behind last year’s pace.

By the close of trading on July 31, the price of crude oil (CL=F) rose to $40.41 per barrel, slightly ahead of its June 30 price of $39.35 per barrel. The national average retail regular gasoline price was $2.175 per gallon on July 27, $0.001 higher than the June 29 selling price of $2.174 but $0.540 less than a year ago. The price of gold soared, climbing to $1,989.90 by close of business on July 31, up from its June closing price of $1,798.80.

Stock Market Indexes

Market/Index 2019 Close Prior Month As of July 31 Month Change YTD Change
DJIA 28,538.44 25,812.88 26,428.32 2.38% -7.39%
Nasdaq 8,972.60 10,058.77 10,745.27 6.82% 19.76%
S&P 500 3,230.78 3,100.29 3,271.12 5.51% 1.25%
Russell 2000 1,668.47 1,441.37 1,480.43 2.71% -11.27%
Global Dow 3,251.24 2,821.05 2,920.53 3.53% -10.17%
Fed. Funds 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.66% 0.53% -13 bps -138 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.

Latest Economic Reports

  • Employment: Employment increased by 4.8 million in June after adding 2.5 million jobs in May. Notable job gains occurred in leisure and hospitality, education and health services, retail trade, manufacturing, and professional and business services. The unemployment rate dropped 2.2 percentage points to 11.1% for the month as the number of unemployed persons dropped by 3.2 million to 17.8 million. Although unemployment fell in May and June, the jobless rate and the number of unemployed are up by 7.6 percentage points and 12.0 million, respectively, since February. In June, average hourly earnings fell for the second consecutive month, decreasing by $0.35 to $29.37, primarily due to job gains among lower-paid workers. Average hourly earnings increased by 5.0% over the last 12 months ended in June. The average workweek decreased by 0.2 hour to 34.5 hours in June. The labor participation rate for June increased 0.7 percentage point to 61.5%. The employment-population ratio rose by 1.8 percentage points to 54.6% last month.
  • Claims for unemployment insurance began to drop in June and July following May’s historic levels. Nevertheless, as of July 18, there were over 17 million workers still receiving unemployment insurance. The insured unemployment rate was 11.6% as of July 18. The largest increases in initial claims for the week ended July 18 were in Louisiana (+5,728), Virginia (+5,654), California (+4,680), Tennessee (+3,713), and Alabama (+3,113). During the week ending July 11, 46 states reported 12,413,322 individuals claiming Pandemic Unemployment Assistance benefits, and 46 states reported 1,055,098 individuals claiming Pandemic Emergency Unemployment Compensation benefits.
  • FOMC/interest rates: The Federal Open Market Committee held its regularly scheduled meeting at the end of July and unanimously voted to hold the target range for the federal funds rate at its current 0.00%-0.25%. Although the FOMC noted that economic activity and employment have picked up somewhat in recent months, they remain well below their levels at the beginning of the year. It was also noted that the ongoing public health crisis caused by the COVID-19 pandemic will weigh heavily on economic activity, employment, and inflation in the near term. The FOMC expects to maintain this rate until it is confident the economy has weathered the recent events. The FOMC isn’t scheduled to meet again until September.
  • GDP/budget: According to the advance estimate for the second-quarter gross domestic product, the economy decelerated at an annualized rate of 32.9%. The GDP decreased 5.0% in the first quarter. Stay-at-home orders issued in March and April in response to the COVID-19 pandemic greatly impacted the economy. Consumer spending was a big drag, falling 34.6%, reeling from the initial effects of the COVID-19 pandemic. Fixed investment fell 29.9% in the second quarter (-1.4% in the first quarter), and nonresidential fixed investment dropped 27.0% in the second quarter, compared to a 6.4% decline in the prior quarter. Exports were down 64.1%, and imports sank 53.74%. Nondefense government expenditures increased 39.7% due to stimulus spending programs initiated in response to the pandemic.
  • The Treasury budget deficit may have come in smaller than expected in May, but it surged in June. The deficit was $864.1 billion, exceeding the June 2019 budget deficit by nearly $855 billion. Government spending reached $1.1 trillion in June. Through the first nine months of fiscal 2020, the deficit is $2.74 trillion. Over the same period for the previous fiscal year, the budget deficit was $744.1 billion.
  • Inflation/consumer spending: According to the Personal Income and Outlays report for June, personal income and disposable (after-tax) personal income fell 1.1% and 1.4%, respectively. This followed May’s decreases of 4.4% (personal income) and 5.1% (disposable personal income). The decrease in personal income last month is largely attributable to a reduction in federal government payments from recovery programs initiated due to the pandemic. Consumers ramped up their spending in June, as personal consumption expenditures increased 5.6% after climbing 8.5% in May. Inflation remains muted as prices for consumer goods and services rose a scant 0.8% in June after creeping ahead 0.1% the previous month. For the past 12 months, consumer prices are up a mere 0.8%.
  • Following three consecutive monthly declines, consumer prices rose 0.6% in June, according to the Consumer Price Index. Year to date, consumer prices are up 0.6%. Gasoline prices surged in June, climbing 12.3%. Excluding food and energy, consumer prices increased 0.2% for June and 1.2% over the last 12 months.
  • Prices that producers receive for goods and services declined 0.2% in June after climbing 0.4% in May. Year to date, producer prices are down 0.8%. In June, the decrease in overall producer prices was driven by a 0.3% decline in prices for services. Producer prices for goods rose 0.2%.
  • Housing: The housing sector posted strong sales numbers in June. Sales of existing homes jumped 20.7% last month after plunging in May and April. Over the 12 months ended in June, existing-home sales are down 11.3% (-26.6% for the 12 months ended in May). The median existing-home price in June was $295,300 ($284,600 in May). Unsold inventory of existing homes represents a 4.0-month supply at the current sales pace, down from 4.8 months in May. Sales of existing single-family homes vaulted 19.9% in June over the previous month, but are off 9.9% from a year ago. After climbing 16.6% in May, sales of new single-family homes surged again in June, increasing 13.8% for the month. The median sales price of new houses sold in June was $329,200 ($317,900 in May). The average sales price was $384,700 ($368,800 in May). June’s inventory of new single-family homes for sale represents a supply of 4.7 months at the current sales pace.
  • Manufacturing: Total industrial production rose 5.4% in June after increasing 1.4% in May; even so, it remained 10.9% below its pre-pandemic February level. For the second quarter as a whole, the index fell at an annual rate of 42.6%, its largest quarterly decrease since the industrial sector retrenched after World War II. Manufacturing output climbed 7.2% in June, as all major industries posted increases. The largest gain, 105.0%, was registered by motor vehicles and parts, while factory production elsewhere rose 3.9%. Mining production fell 2.9%, and the output of utilities increased 4.2%. Total industrial production was 10.8% lower in June than it was a year earlier.
  • New orders for durable goods followed May’s 15.1% increase by climbing 7.3% in June. Transportation equipment, up for two consecutive months, again drove the June increase, surging ahead by 20.0%. Excluding transportation, new orders increased 3.3%. Excluding defense, new orders increased 9.2%.
  • Imports and exports: The price index for U.S. imports rose 1.4% in June, following a 0.8% increase in May. Both the June and May advances were driven by rising fuel prices. U.S. export prices also increased 1.4% in June, after advancing 0.4% the previous month. Year to date, import prices are down 3.8%, while export prices have fallen 4.4%.
  • The international trade in goods deficit was $70.6 billion in June, down $4.6 billion from $75.3 billion in May. Exports of goods for June were $102.6 billion, $12.5 billion more than May exports. Imports of goods for June were $173.2 billion, $7.9 billion more than May imports. Exports of motor vehicles increased 144% in June over May. Imports of motor vehicles climbed 108% in June.
  • The latest information on international trade in goods and services, out July 2, is for May and shows that the goods and services trade deficit was $54.6 billion, an increase of $4.8 billion, or 9.7% over the April deficit. May exports were $6.6 billion, or 4.4% less than April exports. May imports were $1.8 billion, or 0.9% less than April imports. Year to date, the goods and services deficit sits at $223.4 billion, a decrease of $23.3 billion, or 9.1%, from the same period in 2019.
  • International markets: After much haggling, European Union leaders agreed to a historic $858 billion recovery fund to help rebuild EU economies decimated by the pandemic. The stimulus is much needed, particularly after eurozone gross domestic product fell 40.3% in the second quarter, pushing Europe into recession territory. British stocks fell in July as the FTSE 100 lost roughly 3.0%. The Hang Seng Index declined nearly 1.7% for the month. China’s gross domestic product rebounded from the initial impact of the COVID-19 virus, expanding 11.5% in the second quarter after falling 9.8% in the first quarter.
  • Consumer confidence: The Conference Board Consumer Confidence Index® decreased in July after increasing in June. The index stands at 92.6, down from 98.3 in June. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — improved from 86.7 to 94.2. However, the Expectations Index, which is based on consumers’ short-term outlook for income, business, and labor market conditions, decreased from 106.1 in June to 91.5 last month.

Eye on the Month Ahead

June’s economic data was a mixed bag. Nearly 5 million jobs were added to the labor force, the housing sector picked up steam, and industrial production rose. On the other hand, the federal budget deficit neared $900 billion, the international trade deficit increased, and producer prices sank. As more data for July is released, it will likely offer a mixed bag of good and bad as the economy slowly pushed toward recovery. Entering August, most eyes will focus on Congress and the president as they try to hammer out another financial stimulus package.

What I’m Watching This Week – 3 August 2020

The Markets (as of market close July 31, 2020)

Equities continued their positive run of Mondays by posting solid gains again to start last week. The technology sector led the Nasdaq to power ahead by 1.7%. The small caps of the Russell 2000 advanced 1.2%, and the large caps of the S&P 500 (0.7%) and the Dow (0.4%) also climbed higher last Monday. Crude oil prices and Treasury yields rose, while the dollar declined. Gold prices continued to soar as it reached its highest level in history, a possible indication that investors view the economy as stagnating.

While last Tuesday saw movement on further economic stimulus, that development didn’t help stocks. Each of the benchmark indexes lost value, giving back Monday’s gains. Less-than-favorable quarterly earnings reports from some major companies sent shares tumbling. The Nasdaq was hardest hit, falling 1.3%, followed by the Russell 2000, which gave back 1.0%. The Dow (-0.8%) and the S&P 500 (-0.7%) also fell last Tuesday. Crude oil prices dipped 1.5%, Treasury yields dropped, while the dollar and gold rose.

After a slow start to the day, stocks rebounded last Wednesday following the Federal Reserve’s announcement that interest rates will remain the same and economic stimulus will continue. The Dow rose 0.6%, the S&P 500 advanced 1.3%, and the Nasdaq gained 1.4%. Crude oil prices climbed, while the dollar and Treasury yields fell.

Last Thursday proved to be another tough day for stocks. Only the Nasdaq gained value, rising 0.4% by the end of trading. The remaining benchmark indexes fell behind, led by the Dow, which dropped 0.9%, followed by the Global Dow, which landed -0.8% in the red. Both the S&P 500 and the Russell 2000 lost 0.4%. Investors received little encouraging news on the day. A consensus has yet to be reached on the next round of government pandemic relief. The second-quarter GDP saw the economy regress at a rate of nearly 33%. And claims for unemployment insurance increased for the second straight week.

The week ended with tech stocks surging, driving the Nasdaq ahead 1.5% by the close of trading last Friday. Positive earnings report from some major market moving companies helped drive stocks higher, despite mixed overall earnings results, worries about economic recovery, and increasing virus cases.

The Nasdaq rebounded from a poor start to close last week up 3.7%. The S&P 500 climbed 1.7%, followed by the Russell 2000, which advanced 0.9%. The Dow (-0.2%) and the Global Dow (-1.2%) ended last week in the red. Year to date, the Nasdaq is no longer the only benchmark index in the black. The S&P 500 is now 1.25% ahead of its 2019 year-end value following last week’s solid performance.

Crude oil prices ended the week at $40.41 per barrel by late Friday afternoon, down from the prior week’s price of $40.58. The price of gold (COMEX) continues to surge, climbing for the seventh consecutive week. By the close of trading last Friday, the price of gold was $1,989.90, up from the prior week’s price of $1,899.60. The national average retail price for regular gasoline was $2.175 per gallon on July 27, $0.011 lower than the prior week’s price, and $0.540 less than a year ago.

Stock Market Indexes

Market/Index 2019 Close Prior Week As of 7/31 Weekly Change YTD Change
DJIA 28,538.44 26,469.89 26,428.32 -0.16% -7.39%
Nasdaq 8,972.60 10,363.18 10,745.27 3.69% 19.76%
S&P 500 3,230.78 3,215.63 3,271.12 1.73% 1.25%
Russell 2000 1,668.47 1,467.55 1,480.43 0.88% -11.27%
Global Dow 3,251.24 2,956.92 2,920.53 -1.23% -10.17%
Fed. Funds target rate 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.58% 0.53% -5 bps -138 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 News

  • Following its latest meeting, which concluded on July 29, the Federal Open Market Committee decided to maintain the federal funds target rate range at its current 0.00%-0.25%. Mirroring its statement last June, the Committee noted that although economic activity and job growth have picked up recently, it is nowhere near the levels reached at the beginning of the year. In fact, overall financial conditions have improved due to policy measures to support the economy and the flow of credit to U.S. households and businesses. In keeping with that trend, the Committee decided to hold quantitative easing in place and will increase holdings of Treasuries and mortgage-backed securities at least at the current pace. The FOMC isn’t scheduled to meet again until September.
  • We knew the pandemic took a big bite out of the economy, but the initial report on gross domestic product for the second quarter shows the enormity of the drop. The second-quarter GDP decreased at an annualized rate of 32.9% according to the first, or advance, estimate. Consumer spending dropped 34.6%, nonresidential fixed investment fell 27.0%, and residential investment plummeted 38.7%. Exports plunged 64.1% and imports sank 53.4%. Much of the drag on the economy happened in April and parts of May. What will the third-quarter GDP look like? It should reflect improvement based on available information and reports from June and July.
  • According to the latest information from the Bureau of Economic Analysis, consumer prices increased 0.4% in June, although personal income and disposable (after-tax) income decreased 1.1% and 1.4%, respectively. Consumer spending ramped up 5.6% in June. The decrease in personal income in June was more than accounted for by a decrease in government social benefits to persons as payments made to individuals from federal economic recovery programs in response to the COVID-19 pandemic continued, but at a lower level than in May. Partially offsetting the decrease in other government social benefits were increases in compensation of employees and proprietors’ income as portions of the economy continued to reopen in June. Over the past 12 months ended in June, prices for consumer goods and services are up only 0.8% and 0.9%, excluding food and energy — well below the Fed’s 2.0% target rate for inflation.
  • New orders for manufactured durable goods increased 7.3% in June following a 15.1% increase in May. Much of the increase centered around transportation, which climbed 20.0% last month. Excluding transportation, new orders for durable goods rose 3.3% in June. Shipments jumped 14.9%; unfilled orders, down three of the last four months, decreased 1.4%; while inventories inched up 0.1%. New orders for nondefense capital goods (assets used to produce consumer goods) fell 16.4% in June.
  • The international trade in goods deficit was $70.6 billion in June, down $4.6 billion from May. Exports of goods for June were $102.6 billion, $12.5 billion more than May exports. Imports of goods for June were $173.2 billion, $7.9 billion more than May imports. A surge in both exports and imports of motor vehicles drove the overall June advance.
  • For the week ended July 25, there were 1,434,000 claims for unemployment insurance, an increase of 12,000 from the previous week’s level, which was revised up by 6,000. According to the Department of Labor, the advance rate for insured unemployment claims was 11.6% for the week ended July 18, an increase of 0.5 percentage point from the prior week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended July 18 was 17,018,000, an increase of 867,000 from the prior week’s level, which was revised down by 46,000.

Eye on the Week Ahead

The first week of August focuses on manufacturing, international trade, and employment. Purchasing managers reported growth in the manufacturing sector in June. As more businesses opened in July, it is expected that the latest report for July will show further growth in manufacturing. The international trade in goods and services deficit was $55 billion in May. The deficit is expected to narrow slightly for June. There were 4,800,000 new jobs added in June, although average earnings fell 1.2%. July is expected to see a slight drop in the number of new jobs created compared to June.

What I’m Watching This Week – 27 July 2020

The Markets (as of market close July 24, 2020)

Last week started off on a high note as stocks reached levels not seen since February. The Nasdaq gained 2.5% last Monday, led by a surging Amazon, and Zoom Technologies soared to a record high following the publication of positive COVID-19 vaccine results. Investors were encouraged by signs out of Washington that additional stimulus was on the way. The S&P 500 advanced 0.8% on the day while the Dow’s gain was negligible.

The Russell 2000 recovered from a poor Monday by gaining 1.3% last Tuesday to lead the benchmark indexes listed here. The Global Dow rose 0.9%, buoyed by a new round of economic stimulus from the European Union. The Dow climbed 0.6%, and the S&P 500 inched up 0.2%. The Nasdaq retreated from its record high on Monday, giving back 0.8% last Tuesday.

Wednesday saw equities rise despite an increase in tensions between the United States and China. Pfizer vaulted 5.1% on positive COVID-19 vaccine developments. The Dow and the S&P 500 each gained nearly 0.6%, with the latter reaching a five-month high. The Nasdaq and the Russell 2000 each gained 0.2% on the day.

Stocks ended a 4-day run last Thursday, falling to their lowest levels in a week. An unanticipated rise in unemployment claims and lower-than-expected earnings reports from some major tech companies contributed to the decline. Stock prices fell for some of the major market players including Amazon, Alphabet (Google), Facebook, Microsoft, Apple, and Tesla. The Nasdaq plunged 2.3% followed by the Dow, which fell 1.3%. The S&P 500 dropped 1.2%. Crude oil prices, the dollar, and Treasury yields all declined.

Equities ended last week on a sour note with each of the indexes listed here losing value. The Russell 2000 dropped 1.5% on the day, followed by the Nasdaq (-0.9%), the Dow (-0.7%), the Global Dow (-0.7%), and the S&P 500 (-0.6%). Investors seemed concerned over escalating discord between the United States and China, disappointing earnings reports, and the likelihood of more fiscal stimulus.

Last week saw the run of solid market gains end as each of the benchmark indexes listed here posted losses. The Nasdaq, which had strung together several weeks of gains, fell back for the second consecutive week. The large caps of the Dow and the S&P 500 also lagged after advancing for three consecutive weeks. Year-to-date, the Nasdaq is still well ahead of its 2019 closing value, while the S&P 500 is within 0.5% of breaking even. The Dow, Global Dow, and Russell 2000 remain well off their respective 2019 closing marks.

Crude oil prices ended the week at $41.18 per barrel by late Friday afternoon, up from the prior week’s price of $40.58. The price of gold (COMEX) advanced for the sixth consecutive week, closing at $1,899.60, up from the prior week’s price of $1,812.20. The national average retail price for regular gasoline was $2.186 per gallon on July 20, $0.009 lower than the prior week’s price, and $0.564 less than a year ago.

Stock Market Indexes

Market/Index 2019 Close Prior Week As of 7/24 Weekly Change YTD Change
DJIA 28,538.44 26,671.95 26,469.89 -0.76% -7.25%
Nasdaq 8,972.60 10,503.19 10,363.18 -1.33% 15.50%
S&P 500 3,230.78 3,224.73 3,215.63 -0.28% -0.47%
Russell 2000 1,668.47 1,473.32 1,467.55 -0.39% -12.04%
Global Dow 3,251.24 2,959.80 2,956.92 -0.10% -9.05%
Fed. Funds target rate 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.62% 0.58% -4 bps -133 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 News

  • Sales of existing homes rebounded in June following declines in March, April, and May. According to the latest report from the National Association of Realtors®, total home sales jumped 20.7% last month from May. However, existing-home sales are 11.3% below their pace of a year ago. The median existing-home price for all housing types in June was $295,300 ($284,600 in May), up 3.5% from June 2019. Total inventory is up 1.3% in June and sits at a four-month supply. Sales of existing single-family homes also surged in June, climbing 19.9% from May. Single-family home sales are down 9.9% from a year ago. The median existing single-family home price was $298,600 in June, up 3.5% from June 2019.
  • New single-family home sales also surged in June, climbing 13.8% above May’s totals. Sales of new single-family homes are 6.9% above the June 2019 estimate. The median sales price of new houses sold in June 2020 was $329,200. The average sales price was $384,700. Inventory of new single-family homes for sale in June was 307,000, representing a 4.7-month supply at the current sales rate.
  • For the week ended July 18, there were 1,416,000 claims for unemployment insurance, an increase of 109,000 from the previous week’s level, which was revised up by 7,000. According to the Department of Labor, the advance rate for insured unemployment claims was 11.1% for the week ended July 11, a decrease of 0.7 percentage point from the prior week’s revised rate. The advance number of those receiving unemployment insurance benefits during the week ended July 11 was 16,197,000, a decrease of 1,107,000 from the prior week’s level, which was revised down by 34,000.

Eye on the Week Ahead

The last week of July will focus on the first estimate for the second-quarter gross domestic product. The GDP decreased 5.0% in the first quarter of 2020. The June report on personal income and spending is out at the end of the week. Not unexpectedly, personal income fell 4.2% in May, but consumer spending increased 8.2%. The June tally should show better numbers for income, as many businesses ramped up operations last month.

What I’m Watching This Week – 20 July 2020

The Markets (as of market close July 17, 2020)

Stocks surged early last Monday only to fall back by the end of the day. Earlier in the day, the S&P 500 reached its highest level since the COVID-19 pandemic sent equities reeling. The Nasdaq hit another record high in early trading. Unfortunately, stocks couldn’t hold their values as states hard-hit by growing numbers of reported virus cases began to rein in reopening measures. European stocks climbed last Monday as did Treasury bond yields. Crude oil prices dipped ahead of an OPEC meeting that could result in plans to ease production cuts.

Equities rebounded last Tuesday as the Dow rose 2.1%, the S&P 500 climbed 1.3%, the Nasdaq advanced 0.9%, and the Russell 2000 gained 1.76%. Treasury yields slid 3.91% while crude oil prices jumped 0.85%. Market sectors advancing last Tuesday included energy, materials, industrials, and consumer staples.

Optimism about progress on a COVID-19 vaccine spurred investors last Wednesday. By the end of the day, the Russell 2000 jumped 3.5%, followed by the Global Dow, which advanced 1.3%. The S&P 500 gained 0.9%, the Dow increased 0.85%, and the Nasdaq rose 0.6%. Crude oil and Treasury yields grew while the dollar fell. Banks led financial stocks higher, and energy stocks also climbed.

A drop in technology shares pulled stocks lower last Thursday, ending a two-day rally. The Nasdaq fell 0.7% as Microsoft, Amazon, and Apple Inc. lost value. The Dow dropped 0.5%, the S&P 500 sank 0.3%, and the Russell 2000 fell 0.7%. Treasury yields declined 2.9%, and crude oil prices decreased 1.2%.

Stocks were mixed last Friday as the S&P 500 and the Nasdaq posted modest gains while the Dow fell for the second consecutive day. Within the S&P 500, the health-care sector soared to a record high. Other sectors advancing last Friday included utilities, real estate, and materials, while financials and energy lagged.

For the week, only the Nasdaq failed to post a gain while each of the other indexes listed here advanced. The S&P 500 gained 1.25% and is less than 0.2 percentage point from its 2019 closing value. For the week, the Russell 2000 led the way, climbing 3.56%, followed by the Dow, which rose nearly 2.30%. The Nasdaq, despite losing a little more than 1.0%, is still more than 17.0% ahead of its 2019 ending mark. Treasury yields ended last week about where they started, while crude oil and gold each closed the week ahead.

Crude oil prices ended the week at $40.58 per barrel by late Friday afternoon, up from the prior week’s price of $40.32. The price of gold (COMEX) advanced for the fifth consecutive week, closing at $1,812.20, up from the prior week’s price of $1,801.40. The national average retail price for regular gasoline was $2.195 per gallon on July 13, $0.018 higher than the prior week’s price but $0.584 less than a year ago.

Stock Market Indexes

Market/Index 2019 Close Prior Week As of 7/17 Weekly Change YTD Change
DJIA 28,538.44 26,075.30 26,671.95 2.29% -6.54%
Nasdaq 8,972.60 10,617.44 10,503.19 -1.08% 17.06%
S&P 500 3,230.78 3,185.04 3,224.73 1.25% -0.19%
Russell 2000 1,668.47 1,422.68 1,473.32 3.56% -11.70%
Global Dow 3,251.24 2,891.45 2,959.80 2.36% -8.96%
Fed. Funds target rate 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.63% 0.62% -1 bps -129 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 News

  • Consumer prices rose 0.6% in June after falling 0.1% in May. Over the last 12 months, consumer prices increased 0.6%. Gasoline prices rose sharply in June, jumping 12.3% after plunging 20.6% in April and 3.5% in May. For the 12 months ended in June, energy prices are down 12.6%. Food prices increased 0.6% last month and have risen each month since last December. Consumer prices less food and energy increased 0.2% in June and are up 1.2% over the past 12 months.
  • Retail sales jumped 7.5% in June, driven higher by a 105.1% advance in retail sales at clothing and clothing accessories stores. Also enjoying a strong June were sales at electronics and appliance stores and furniture and home furnishing stores. Sales at food services and drinking places climbed 20.0% in June after falling 26.3% in May. Online sales fell 2.4% last month after soaring 23.5% in May.
  • June saw the federal budget deficit soar to $864.1 billion as June spending surpassed $1.1 trillion. The deficit last June was $8.5 billion. Through the first nine months of the fiscal year, the deficit sits at $2.74 trillion — an increase of 267% from the same period last fiscal year. A $511.4 billion jump in June outlays by the Small Business Administration, primarily for the Paycheck Protection Program, pushed overall monthly spending higher.
  • Import prices rose 1.4% in June after advancing 0.8% the previous month. The June increase was the highest since March 2012. A record 21.9% monthly increase in fuel prices drove overall import prices higher. Excluding fuel, import prices rose 0.3% in June. Despite the last two monthly increases, import prices fell 3.8% for the 12 months ended in June. Export prices climbed 1.4% in June, the largest monthly increase since March 2011. Over the last 12 months ended in June, export prices decreased 4.4%.
  • According to the latest information from the Federal Reserve, total industrial production rose 5.4% in June after increasing 1.4% in May. Even so, industrial production remained 10.9% below its pre-pandemic February level. For the second quarter as a whole, industrial production fell at an annual rate of 42.6%, its largest quarterly decrease since the industrial sector retrenched after World War II. Manufacturing output climbed 7.2% in June, driven by a 105% surge in motor vehicles and parts. Excluding motor vehicles, factory production rose 3.9%. Mining production fell 2.9%, and the output of utilities increased 4.2%. Overall, total industrial production was 10.8% lower in June than it was a year earlier.
  • New residential construction picked up steam in June. Building permits (+2.1%), housing starts (+17.3%), and housing completions (+4.3%) each rose above their respective May levels. Single-family construction was even more robust last month as building permits, housing starts, and housing completions of single-family homes were significantly higher than in May.
  • For the week ended July 11, there were 1,300,000 claims for unemployment insurance, a decrease of 10,000 from the previous week’s level, which was revised down by 4,000. According to the Department of Labor, the advance rate for insured unemployment claims was 11.9% for the week ended July 4, a decrease of 0.3 percentage point from the prior week’s revised rate. The advance number of those receiving unemployment insurance benefits during the week ended July 4 was 17,338,000, a decrease of 422,000 from the prior week’s level, which was revised down by 302,000.

Eye on the Week Ahead

The housing market is front and center this week with the latest reports on sales of both existing and new homes. Sales of existing homes are expected to rebound in June from May’s nearly 10% decline. On the other hand, new home sales soared in May and could retreat in June.

What I’m Watching This Week – 13 July 2020

The Markets (as of market close July 10, 2020)

Last Monday proved to be a good start to the week for equities as each of the benchmark indexes listed here posted solid gains. The Nasdaq reached a record high as surging tech stocks drove that index up 2.2% for its fifth consecutive gain. The Dow finished the day up nearly 1.8%, and the S&P 500 climbed 1.6%.

Last Tuesday saw the end of a five-day winning streak as stocks slid, despite reports from the White House and Senate promoting a new round of stimulus. An increase in COVID-19 outbreaks seemed to dim investor hopes for a quick economic recovery. Sectors taking a particular hit were industrials, energy, and financials. The small caps of the Russell 2000 lost nearly 2.0%, the Dow fell 1.5%, the S&P 500 dropped 1.1%, and the Nasdaq dipped 0.9%.

Equities rebounded last Wednesday as Apple and Amazon sent the Nasdaq to another record high. Gold shot past $1,800 per ounce, crude oil closed at nearly $41.0 per barrel, and Treasury yields dipped.

Last Thursday saw stocks fall on fears that the rising number of COVID-19 cases will undercut the economy. The Dow dropped 1.4%, the small caps of the Russell 2000 fell 2.0%, the Global Dow gave back 0.8%, and the S&P 500 lost 0.6%. Industrials, energy, and financials were market sectors hit particularly hard. Only the Nasdaq closed higher, gaining 0.5% as tech stocks held their own. Crude oil prices plunged 2.6%. Treasury yields fell as bond prices surged.

Stocks climbed higher last Friday following the release of promising clinical results for COVID-19 treatment by Gilead Science. Finance, banks, energy, communications, and industrials performed well on the day. Each of the indexes listed here enjoyed solid daily gains, led by the Russell 2000, which closed last Friday up 1.7%.

Despite its strong showing last Friday, the Russell 2000 ended last week as the only index in the red. The Nasdaq led the way, gaining 4.0%, followed by the S&P 500, the Global Dow, and the Dow. Investors seem to be clinging to any positive news to offset the record number of reported virus cases and ongoing discord with China, particularly as it relates to that country’s dealings with Hong Kong.

Crude oil prices rallied late last week, closing at $40.49 per barrel by late Friday afternoon, up from the prior week’s price of $40.32. The price of gold (COMEX) advanced for the fourth consecutive week, closing at $1,801.40, up from the prior week’s price of $1,787.60. The national average retail regular gasoline price was $2.177 per gallon on July 6, $0.003 higher than the prior week’s price but $0.566 less than a year ago.

Stock Market Indexes

Market/Index 2019 Close Prior Week As of 7/10 Weekly Change YTD Change
DJIA 28,538.44 25,827.36 26,075.30 0.96% -8.63%
Nasdaq 8,972.60 10,207.63 10,617.44 4.01% 18.33%
S&P 500 3,230.78 3,130.01 3,185.04 1.76% -1.42%
Russell 2000 1,668.47 1,431.86 1,422.68 -0.64% -14.73%
Global Dow 3,251.24 2,862.16 2,891.45 1.02% -11.07%
Fed. Funds target rate 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.66% 0.63% -3 bps -128 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 News

  • Producer prices reversed course in June, dropping 0.2% after climbing 0.4% the previous month. For the last 12 months, producer prices are down 0.8%. In June, a 1.8% decline in margins for trade services (trade indexes measure changes in margins received by wholesalers and retailers) was the primary drag on producer prices. Prices for goods rose 0.2% in June.
  • According to the latest Job Openings and Labor Turnover report, the number of hires increased by 2.4 million to 6.5 million in May — the largest monthly increase of hires since the series began. Separations decreased by 5.8 million to 4.1 million, also a series high. These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the COVID-19 pandemic and efforts to contain it. Over the 12 months ended in May, hires totaled 68.5 million and separations totaled 79.8 million, yielding a net employment loss of 11.3 million.
  • Economic activity in the services sector surged in June following two consecutive monthly retractions. According to the latest Non-Manufacturing ISM® Report On Business®, the non-manufacturing index climbed 11.7 percentage points, the largest single-month percentage point increase in the history of the index. Business activity, new orders, prices, and employment each advanced in June following May’s dismal performance. The notable increase in the services sector is indicative of businesses starting to reopen last month.
  • For the week ended July 4, there were 1,314,000 claims for unemployment insurance, a decrease of 99,000 from the previous week’s level, which was revised down by 14,000. According to the Department of Labor, the advance rate for insured unemployment claims was 12.4% for the week ended June 27, a decrease of 0.5 percentage point from the prior week’s revised rate. The advance number of those receiving unemployment insurance benefits during the week ended June 27 was 18,062,000, a decrease of 698,000 from the prior week’s level, which was revised down by 530,000.

Eye on the Week Ahead

This week the Consumer Price Index is likely to show some upward price pressure in June. Also, industrial production is expected to climb in June as more businesses reopened.

What I’m Watching This Week – 6 July 2020

The Markets (as of market close July 3, 2020)

Domestic stocks surged last Monday, as a robust pending home sales report overshadowed an increase in COVID-19 cases. Pending sales of existing homes soared over 44% in May, a record-setting rate that should lead to gains in existing homes sales in June and July. A jump in Boeing Co. stock helped propel the S&P 500, which virtually wiped out its June losses. The small caps of the Russell 2000 climbed more than 3.0%, followed by the Dow, the S&P 500, the Nasdaq, and the Global Dow. Crude oil prices gained nearly 3.0% while bond yields were unchanged.

Equities closed what proved to be a volatile June on a high note. The Dow ended Tuesday up 0.9%, the S&P 500 gained 1.5%, and the Global Dow rose 0.8%. But the big winners were the Russell 2000, up 1.4%, and the Nasdaq, which climbed 1.9%. Investors pushed stocks higher despite sobering news related to the ongoing battle against COVID-19. Top government health adviser, Dr. Anthony Fauci cautioned that a COVID-19 vaccine remains uncertain. Also, Federal Reserve Chairman Jerome Powell, during testimony before the House Committee on Financial Services, stated that while economic data is showing some positive signs, economic growth remains extraordinarily uncertain and will depend in large part on success in containing the virus.

Wednesday produced a mixed bag for stocks. The Nasdaq, Global Dow, and S&P 500 posted gains, while the Dow and Russell 2000 lost value. Crude oil prices advanced, while Treasuries and the dollar fell. Early in the day stocks climbed on news that preliminary tests of a COVID-19 vaccine developed by Pfizer and BioNTech were favorable. However, the stock gains were short-lived following reports that both California and Arizona had their biggest daily increases in virus cases.

June’s employment figures far surpassed expectations with more than 4.8 million new jobs added, giving investors another sign that the economy is picking up steam. Heading into the Fourth of July weekend, the major markets were closed last Friday in observance of the holiday. Nevertheless, each of the benchmark indexes listed here enjoyed solid weekly returns. The Nasdaq, once again, led the way, gaining over 4.6%, followed by the S&P 500, which closed up by more than 4.0%. Treasury yields remained steady, while crude oil prices gained and the dollar fell slightly.

Crude oil prices rebounded last week, closing at $40.32 per barrel by late Thursday afternoon, up from the prior week’s price of $38.10. The price of gold (COMEX) advanced for the third consecutive week, closing at $1,787.60 by late Thursday afternoon, up from the prior week’s price of $1,784.10. The national average retail regular gasoline price was $2.174 per gallon on June 29, $0.045 higher than the prior week’s price but $0.539 less than a year ago.

Stock Market Indexes

Market/Index 2019 Close Prior Week As of 7/2 Weekly Change YTD Change
DJIA 28,538.44 25,015.55 25,827.36 3.25% -9.50%
Nasdaq 8,972.60 9,757.22 10,207.63 4.62% 13.76%
S&P 500 3,230.78 3,009.05 3,130.01 4.02% -3.12%
Russell 2000 1,668.47 1,378.78 1,431.86 3.85% -14.18%
Global Dow 3,251.24 2,775.41 2,862.16 3.13% -11.97%
Fed. Funds target rate 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.63% 0.66% 3 bps -125 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 News

  • There were 4.8 million new jobs added in June, and the unemployment rate declined by 2.2 percentage points to 11.1%. These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the COVID-19 pandemic and efforts to contain it. In June, employment in leisure and hospitality rose sharply. Notable job gains also occurred in retail trade, education and health services, other services, manufacturing, and professional and business services. The number of unemployed persons fell by 3.2 million to 17.8 million. Although unemployment fell in May and June, the jobless rate and the number of unemployed are up by 7.6 percentage points and 12.0 million, respectively, since February. The labor force participation rate increased by 0.7 percentage point in June to 61.5% but is 1.9 percentage points below its February level. The employment-population ratio, at 54.6%, rose by 1.8 percentage points over the month but is 6.5 percentage points lower than in February. In June, average hourly earnings fell by $0.35 to $29.37, reflecting job gains among lower-paid workers. The average workweek decreased by 0.2 hour to 34.5 hours in June.
  • According to the latest purchasing managers’ index from IHS Markit, manufacturing continued to retract in June, but at a much slower pace than in April and May, as companies began to reopen. New orders from customers helped push production higher last month. The manufacturing sector saw employment decline for the fourth consecutive month in June, however, the overall loss of jobs was considerably weaker than those seen in the prior two months.
  • The news was more positive from the Institute for Supply Management® as it reported that manufacturing actually grew in June. According to the Manufacturing ISM® Report On Business®, the June purchasing managers’ index registered 52.6%, up 9.5 percentage points from the May reading. This figure indicates expansion in the overall economy for the second straight month after April’s contraction. New orders increased dramatically, climbing nearly 25 percentage points from May. Production and employment also expanded notably in June.
  • The international trade in goods and services report for May, out July 2, shows the trade deficit was $54.6 billion, up $4.8 billion, or 9.7%, from April. In May, exports fell 4.4% and imports slid 0.9%. Year to date, the goods, and services deficit decreased $22.3 billion, or 9.1%, from the same period in 2019. Of particular note, the trade deficit with China increased $1.9 billion to $27.9 billion in May. Exports to China increased $0.7 billion to $10.0 billion, and imports from China increased $2.7 billion to $37.9 billion.
  • For the week ended June 27, there were 1,427,000 claims for unemployment insurance, a decrease of 55,000 from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims was 13.2% for the week ended June 20, unchanged from the prior week’s revised rate. The advance number of those receiving unemployment insurance benefits during the week ended June 20 was 19,290,000, an increase of 59,000 from the prior week’s level, which was revised down by 291,000.

Eye on the Week Ahead

The end of the week offers a glimpse at inflationary trends with the latest information on producer prices. Also, this week is the June Treasury budget report. Government spending has been up and income has been down, primarily due to the pandemic.

Quarterly Market Review: April – June 2020

The Markets (second quarter through June 30, 2020)

Stocks rebounded from a dismal March by posting their best monthly returns since 1987, as investors were encouraged by the expectation of additional government stimulus programs and hope that the economy would be reopening soon. The Paycheck Protection Program and Health Care Enhancement Act replenished the Paycheck Protection Program, providing funding for additional small business loans, and offered financial support to hospitals, while increasing the availability of more virus testing. The Federal Reserve added trillions of dollars in funds to its lending programs. Crude oil prices rose nearly 30.0% despite collapsing into negative territory on April 20. A few states began easing lockdown restrictions and reopening a range of businesses. While there were plenty of ups and downs in the market during the month, April closed with each of the benchmark indexes listed here climbing notably higher. The Nasdaq gained 15.45%, followed by the Russell 2000, the S&P 500, the Dow, and the Global Dow.

In May, investors continued to rally to stocks as more states and foreign countries eased restrictions put in place in response to the COVID-19 pandemic. The economy continued to stagger, however. The unemployment rate reached its highest level since the Great Depression while claims for unemployment insurance pushed past 25 million. On the other hand, news of possible breakthroughs in the treatment of COVID-19 cases and the development of a vaccine for the virus provided optimism for investors. Once again, the Nasdaq led the way, advancing 6.75% by the close of May. The Russell 2000 gained 6.36%, followed by the S&P 500, the Dow, and the Global Dow.

June was a month of drastic highs and lows for stocks. For example, the Dow climbed 6.8% in the first week of the month, then fell 5.5% in the second week. However, by the close of June, each of the indexes listed here posted gains with the tech holdings of the Nasdaq leading the way, up nearly 6.0% from its May closing value.

The second quarter of 2020 notched the best quarterly performance since 1998, with each of the benchmark indexes making sizeable gains over their historically poor first-quarter tallies. However, much of the second-quarter growth in the stock market and economy is more of a bounce back from a dismal March and April, when pandemic-related lockdowns and restrictions virtually shut down the economy. Nevertheless, stocks rose as investors focused on favorable economic data and the possibility of further government stimulus, despite rising virus cases and tepid trade relations with China. Of the benchmark indexes listed here, the Nasdaq again proved the strongest, soaring more than 30.0% for the quarter, followed by the small caps of the Russell 2000, which gained 25.0%. The large caps of the S&P 500 and the Dow closed the second quarter up nearly 20.0% while the Global Dow vaulted ahead by more than 14.0%.

Year to date, the Nasdaq remains the only index well ahead of its 2019 year-end closing value. While still in the red, the S&P 500 is within 5.0 percentage points of last year’s final mark, followed by the Dow, the Global Dow, and the Russell 2000.

By the close of trading on June 30, the price of crude oil (WTI) continued to climb, closing at $39.35 per barrel, ahead of the May 29 price of $35.34 per barrel. The national average retail regular gasoline price was $2.129 per gallon on June 22, up from the May 25 selling price of $1.960 but $0.525 less than a year ago. The price of gold finished June at $1,798.80 per ounce, slightly higher than its May 29 closing value of $1,745.80 per ounce.

Stock Market Indexes

Market/Index 2019 Close As of June 30 Monthly Change Quarterly Change YTD Change
DJIA 28,538.44 25,812.88 1.69% 17.77% -9.55%
Nasdaq 8,972.60 10,058.77 5.99% 30.63% 12.11%
S&P 500 3,230.78 3,100.29 1.84% 19.95% -4.04%
Russell 2000 1,668.47 1,441.37 3.40% 25.00% -13.61%
Global Dow 3,251.24 2,821.05 2.59% 14.23% -13.23%
Fed. Funds 1.50%-1.75% 0.00%-0.25% 0 bps 0 bps -150 bps
10-year Treasuries 1.91% 0.66% 2 bps 3 bps -125 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.

Latest Economic Reports

  • Employment: Employment rose by a stunning 2.509 in May after falling 20.687 in April. Notable job gains occurred in leisure and hospitality, construction, education and health services, and retail trade. The unemployment rate dropped 1.4 percentage points to 13.3% for the month as the number of unemployed persons dropped by close to 2.1 million to 21.0 million. Improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the COVID-19 pandemic and efforts to contain it. While these numbers are better, put in perspective, the unemployment rate and number of unemployed persons are up 9.8 percentage points and 15.2 million, respectively, since February. In May, average hourly earnings fell by $0.29 to $29.75, primarily due to job gains among lower-paid workers. Average hourly earnings increased by 6.7% over the last 12 months ended in May. The average workweek rose by 0.5 hour to 34.7 hours in May. The labor participation rate for May was 60.8% (60.2% in April). The employment-population ratio was 52.8% last month, 1.5 percentage points ahead of April’s figure.
  • Claims for unemployment insurance reached historic levels in May, spiking to more than 25.0 million. The rate for insured unemployment claims also reached a historic high of 17.2%. Since the initial impact of the virus in mid-March, nearly 47.5 million initial claims for unemployment benefits have been filed. For the week ended June 13, the number of those receiving unemployment insurance benefits decreased to 19.522, and the rate for insured unemployment claims fell to 13.4%.
  • FOMC/interest rates: The Federal Open Market Committee held its regularly scheduled meeting in early June and unanimously voted to hold the target range for the federal funds rate at its current 0.00%-0.25%. According to the Committee, the ongoing public health crisis caused by the COVID-19 pandemic will weigh heavily on economic activity, employment, and inflation in the near term, while posing considerable risks to the economic outlook over the medium term. The FOMC expects to maintain this rate until it is confident the economy has weathered the recent events, which according to its projections, will run through the year 2022. In addition, the Fed announced that it will be increasing, at least at the current pace, holdings of Treasuries and residential and commercial mortgage-backed securities.
  • GDP/budget: According to the third and final estimate for the first-quarter gross domestic product, the economy decelerated at an annualized rate of 5.0%. Consumer spending was a big drag, falling 6.8%, reeling from the initial effects of the COVID-19 pandemic. Fixed investment fell 1.3% in the first quarter (-0.6% in the fourth quarter), and nonresidential fixed investment dropped 6.4% in the first quarter, compared to a 2.4% decline in the prior quarter. Net exports were down 9.0%, and imports sank 15.7%. Consumer prices advanced at a rate of 1.3% in the first quarter, compared to the fourth quarter (1.4%).
  • The Treasury budget deficit came in smaller than expected in May. Nevertheless, the deficit, at $398.8 billion, was nearly twice as high as the deficit for May 2019. Through the first eight months of fiscal 2020, the deficit is $1.880 trillion, nearly 91.0% greater than the deficit over the same period in fiscal 2019. So far this fiscal year, outlays are 29.4% above the 2019 figure, while receipts are 11.2% lower.
  • Inflation/consumer spending: According to the Personal Income and Outlays report for May (released June 26), personal income and disposable (after-tax) personal income fell 4.2% and 4.9%, respectively. This followed April increases of 10.8% (personal income) and 13.1% (disposable personal income). The decrease in personal income last month is largely attributable to a reduction in federal government payments from recovery programs initiated due to the pandemic. Consumers ramped up their spending in May, as personal consumption expenditures increased 8.2%, after falling 12.6% in April. Inflation remains muted as prices for consumer goods and services rose a scant 0.1% in May after falling 0.5% the previous month. For the past 12 months, consumer prices are up a mere 0.5%.
  • Deflation is trending at the consumer level. The Consumer Price Index slid 0.1% in May, marking the third consecutive monthly decrease, which hasn’t happened in the 63-year history of this index. Year to date, consumer prices are up 0.1%. Excluding food and energy, prices also fell 0.1% last month. Energy prices dropped 1.8% in May for the fifth straight monthly decline. Transportation services are down 3.6%, and airfares plunged 4.9% in May after cascading 15.2% and 12.6% in April and March, respectively. On the other hand, consumer prices for food edged up 0.7% and medical care services rose 0.6% in May.
  • Prices producers receive for goods and services rebounded from a dismal April, climbing 0.4% in May. Year to date, producer prices are down 0.8%, however. In May, energy prices climbed 4.5% after falling 19.0% in April and 6.7% in March. Food prices shot up by 6.0% last month, although trade services fell 0.8%.
  • Housing: Sales of existing homes plunged in May while sales of new single-family homes soared. Existing home sales fell 9.7% in May after falling 17.8% in April. Over the last 12 months, existing home sales are down 26.6%. Sales of existing single-family homes plunged 9.4% last month and are off 24.8% from a year ago. The median existing-home price in May was $284,600 ($286,800 in April). Unsold inventory of existing homes represents a 4.8-month supply at the current sales pace, up from 4.0 months in April. Sales of new single-family homes vaulted 16.6% in May following a slight 0.8% drop in April. The median sales price of new houses sold in May was $317,900 ($303,000 in April). The average sales price was $368,800 ($352,300 in April). May’s inventory of new single-family homes for sale represents a supply of 5.6 months at the current sales pace.
  • Manufacturing: Following April’s dismal report, industrial production increased 1.4% in May. Manufacturing, which had fallen 15.5% the prior month, pushed ahead 3.8% in May. However, total industrial production in May was 15.4% below its pre-pandemic level in February. Compared to May 2019, industrial production is down 15.3%, while manufacturing is off by 16.5% over the same 12-month period. Mining and utilities fell 6.8% and 2.3%, respectively, in May.
  • New orders for durable goods followed April’s 18.1% decline by advancing 15.8% in May. Transportation equipment drove the increase, surging ahead by 80.7% last month. However, excluding transportation, new orders increased 4.0%. For the year, new orders for durable goods have fallen 13.6%. New orders for nondefense capital goods (manufactured assets used by businesses to produce consumer goods) jumped ahead 27.1% in May, also driven primarily by a jump in transportation.
  • Imports and exports: May saw energy prices swing higher, driving import prices up 1.0% after falling 2.6% in April. Imported crude oil prices advanced 31.7% last month after dropping 36.9% in April. Excluding fuel, import prices ticked up 0.1% in May. Since May 2019, import prices have declined 6.0%. The price index for U.S. exports rose 0.5% in May following a 3.3% drop the previous month.
  • The international trade in goods deficit was $74.3 billion in May, up $3.6 billion from April. Exports of goods for May were $90.1 billion, $5.5 billion less than April exports. Imports of goods for May were $164.4 billion, $1.9 billion less than April imports.
  • The latest information on international trade in goods and services, out June 4, is for April and shows that the goods and services trade deficit increased by $7.1 billion, or 16.7%. April exports were $38.9 billion, or 20.5%, less than March exports. April imports were $31.8 billion, or 13.7%, less than March imports. Year to date, the goods, and services deficit sit at $168.5 billion, a decrease of $26.0 billion, or 13.4%, from the same period in 2019.
  • International markets: Global markets rebounded in the second quarter on the heels of fiscal stimulus, easing of restrictions, and interest rates at 0% and below. By the end of March, world stocks had lost about 35.0% from their year-end highs. By the end of June, these same markets are within 10.0% of February’s record highs. A spike in new virus cases could send world markets reeling again. While inflation remains muted in the United States, prices are slowly escalating in Europe, where longer-range forecasts see inflation rising to 1.0% — close to its highest level since early March. In Asia, the Nikkei 225 is up about 2.0% for the month, the Shanghai Composite Index has gained 2.2% for the month, and the Hang Seng Index has climbed nearly 5.0%.
  • Consumer confidence: The Conference Board Consumer Confidence Index® was little changed in May, coming in at 86.6, slightly above April’s 85.7 reading. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — decreased from 73.0 to 71.1. However, the Expectations Index, which is based on consumers’ short-term outlook for income, business, and labor market conditions, improved from 94.3 in April to 96.9 last month.

Eye on the Month Ahead

While the stock market has pushed forward, indicators did not suggest the economy is on the upswing. As states ease restrictions and businesses reopen, the economy should begin the slow process of recovery. However, increases in the number of reported virus cases may prompt the imposition of restrictions, at least in some states, which could impact economic growth.

What I’m Watching This Week – 29 June 2020

The Markets (as of market close June 26, 2020)

The week began with the stock market picking up where it left off the previous week. Each of the benchmark indexes listed here advanced in value, led by the tech-heavy Nasdaq, which jumped 1.10%, pushed higher by Amazon and Adobe. Last Monday’s run marked the seventh straight advance for the Nasdaq — its longest rally of the year. The Russell 2000 gained 1.00%, followed by the S&P 500, the Dow, and the Global Dow. Crude oil reached $40 per barrel for the first time in quite a while, the dollar dropped, and the yield on 10-year Treasuries inched higher. Stock values climbed despite the accelerating number of COVID-19 cases reported.

Tuesday saw both the Nasdaq and Russell 2000 continue to surge. In fact, the Nasdaq hit an all-time high as investors seemed to focus on signs of economic growth and the expectation of more government stimulus. President Trump tweeted that the U.S.-China trade deal remains fully intact, which further encouraged investors despite U.S. health advisor Anthony Fauci’s warning of a disturbing surge in COVID-19 cases. Apple, Amazon, and Microsoft were winners at the end of the day, as were road and rail stocks, real estate, utilities, airlines, and retailers.

Stocks took a nosedive midweek as the growing number of reported COVID-19 cases was too much for investors to ignore. The pandemic is prompting fears that renewed restrictions will slow economic growth. Money poured into bonds, pushing prices higher, and driving yields lower. Among sectors taking a particularly hard hit last Wednesday were energy, financials, and industrials. Airline stocks, which had been climbing as restrictions eased, got pummeled. Each of the indexes listed here took a sizeable hit, led by the small caps of the Russell 2000, which gave back nearly 3.50%. The Dow closed down 2.72% on the day, followed by the Global Dow, the S&P 500, and the Nasdaq, which ended its run of daily gains by sinking 2.19%.

Thursday was a better day for equities as each of the benchmark indexes listed here posted gains, led by the Russell 2000, which climbed nearly 2.00%. Bank stocks enjoyed a good boost after the Federal Deposit Insurance Corporation eased limits on bank risk-taking. As stocks climbed, more bad news came from the COVID-19 front. Thursday, the number of new virus cases surpassed April’s peak, prompting the governor of Texas to pause the process of reopening. Also, new weekly claims for unemployment insurance approached 1.5 million — a figure that’s lower than the prior week, but still indicative of the number of people who have lost their jobs.

Both Texas and Florida imposed new restrictions as reported virus cases surged last Friday, sending stocks tumbling. These are the first states to reimpose restrictions, although several other states are considering added restrictions and/or delaying reopenings. The Dow fell 2.84%, the Nasdaq dropped 2.59%, and both the S&P 500 and Russell 2000 gave back more than 2.40%, respectively.

For the week, each of the benchmarks lost notable value, led by the Dow, which fell more than 3.30%. Clearly, rising COVID-19 cases throughout several parts of the country have curbed investor enthusiasm over encouraging economic news. The market swung up and down for much of the week, with bank stocks being particularly volatile. After the FDIC eased restrictions on bank investing last Thursday, the Federal Reserve indicated its plan to restrict banks’ sharing of profits through dividends and share repurchases. Of the remaining indexes listed here, the S&P 500 fell back into correction territory after dropping 2.86%. The small caps of the Russell 2000 lost nearly 3.00%, the Global Dow declined nearly 2.25%, while the Nasdaq fared the best, losing less than 2.00% for the week.

After climbing higher the week before, crude oil prices sank lower last week, closing at $38.10 per barrel by late Friday afternoon, down from the prior week’s price of $39.50. The price of gold (COMEX) advanced again last week, closing at $1,784.10 by late Friday afternoon, up from the prior week’s price of $1,755.10. The national average retail regular gasoline price was $2.129 per gallon on June 22, 2020, $0.031 higher than the prior week’s price but $0.525 less than a year ago.

Stock Market Indexes

Market/Index 2019 Close Prior Week As of 6/26 Weekly Change YTD Change
DJIA 28,538.44 25,871.46 25,015.55 -3.31% -12.34%
Nasdaq 8,972.60 9,946.12 9,757.22 -1.90% 8.74%
S&P 500 3,230.78 3,097.74 3,009.05 -2.86% -6.86%
Russell 2000 1,668.47 1,418.64 1,378.78 -2.81% -17.36%
Global Dow 3,251.24 2,838.87 2,775.41 -2.24% -14.64%
Fed. Funds target rate 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.69% 0.63% -6 bps -128 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 News

  • The third and final estimate of the gross domestic product for the first quarter of 2020 showed the economy slowed at an annual rate of 5.0%. In the fourth quarter, the GDP increased 2.1%. A main contributor to the deceleration of the economy in the first quarter was consumer spending, which fell 6.8%, exhibiting the initial impact of the pandemic. Business investment fell 1.3%, although residential investment soared 18.2%. The personal consumption expenditures price index increased 1.3%. Excluding food and energy prices, the PCE price index increased 1.7%.
  • According to the latest report from the Bureau of Economic Analysis, consumer spending ramped up 8.2% in May following downturns in March and April, when personal consumption expenditures fell 6.6% and 12.6%, respectively. Consumer prices inched ahead 0.1% last month and are up 0.5% since May 2019. Personal income sank 4.2% last month and disposable, or after-tax, income dropped 4.9%, each figure impacted by a decrease in payments from federal economic recovery programs.
  • The international trade in goods deficit was $74.3 billion in May, up $3.6 billion from $70.7 billion in April. Exports of goods for May were $90.1 billion, $5.5 billion less than April exports. Imports of goods for May were $164.4 billion, $1.9 billion less than April imports.
  • Existing home sales fell 9.7% in May, declining for the third consecutive month. Overall, existing home sales are down 26.6% from a year ago. The median existing-home price for all housing types in May was $284,600, down from April’s $286,800 but 2.3% ahead of the May 2019 median sales price ($278,200). Total housing inventory at the end of May totaled 1.55 million units, up 6.2% from April but down 18.8% from one year ago (1.91 million). Unsold inventory has increased, sitting at a 4.8-month supply at the current sales pace, up from 4.0 months in April.
  • While existing home sales may have fallen in May, sales of new homes soared. According to the Census Bureau, sales of new single-family homes in May were 16.6% above the April total and 12.7% ahead of May 2019. The median sales price of new houses sold in May 2020 was $317,900 ($303,000 in April). The average sales price was $368,800 ($352,300 in April). The estimate of new houses for sale at the end of May was 318,000, which represents a supply of 5.6 months at the current sales rate.
  • New orders for manufactured durable goods rebounded in May, advancing 15.8% over April’s totals. Transportation equipment, primarily vehicles, and aircraft led the increase, climbing a whopping 80.7%. Excluding transportation, new orders increased 4.0% with orders for core capital goods (nondefense capital goods excluding aircraft) up 2.3%. Shipments of durable goods increased 4.4% in May following April’s 18.6% decline. New orders for nondefense capital goods in May increased 27.1%. Shipments increased 0.4%.
  • For the week ended June 20, there were 1,480,000 claims for unemployment insurance, a decrease of 60,000 from the previous week’s level, which was revised up by 32,000. According to the Department of Labor, the advance rate for insured unemployment claims decreased 0.5 percentage point to 13.4% for the week ended June 13. The advance number of those receiving unemployment insurance benefits during the week ended June 13 was 19,522,000, a decrease of 767,000 from the prior week’s level, which was revised down by 255,000.

Eye on the Week Ahead

The employment numbers for June are out this week. May’s report was unexpectedly favorable with 2.5 million new jobs added. However, weekly unemployment claims continue to remain in the millions, which could be an indication that June’s employment figures may not be as favorable as they were the previous month.

What I’m Watching This Week – 22 June 2020

The Markets (as of market close June 19, 2020)

Equities began the week edging higher following the Federal Reserve’s announcement that it would buy corporate bonds under an emergency lending program. The Russell 2000 closed up 2.3%, the Nasdaq gained 1.4%, while the S&P 500 and the Dow eked out gains of less than 1.0%, respectively. After last week’s tailspin, crude oil prices rebounded while the yield on 10-year Treasuries advanced slightly. Investors remain wary, however, as more than 20 states are seeing an uptick in reported cases of COVID-19, and new hotspots in Beijing and India are raising concerns of a resurgence of the pandemic.

Following an impressive retail sales report, stocks jumped higher last Tuesday. Led by the Global Dow (2.45%), each of the benchmark indexes listed here posted gains of at least 1.75% (Nasdaq). Also climbing were crude oil prices (2.24%), gold (0.47%), and the yield on 10-year Treasuries (7.69%). Most sectors advanced, with the best performers being energy, health care, and materials. Along with the robust retail sales report, the Trump administration announced that it is preparing a $1 trillion infrastructure proposal aimed at accelerating the economy.

The Nasdaq inched ahead on Wednesday, but that was the only benchmark to gain. The large caps of the Dow and S&P 500 fell 0.65% and 0.36%, respectively. The Russell 2000 sank 1.77%, and the Global Dow changed negligibly. The yield on 10-year Treasuries dropped 3.04% while crude oil prices decreased 1.75% to $37.71 per barrel. It appears increases in reported COVID-19 cases were enough to pull investors from stocks.

Stocks were mixed last Thursday as concerns over the escalating number of reported virus cases, coupled with another 1.5 million new claims for unemployment insurance, caused investor uneasiness. The Dow fell 0.15% while the S&P 500, the Nasdaq, and the Russell 2000 all posted marginal gains. Energy stocks helped buoy stocks following a pledge from major oil-producing countries to continue to limit output.

Friday closed what may be best described as a roller-coaster ride for stocks. The Dow fell 0.80%, the S&P 500 dropped 0.56%, the Russell 2000 lost 0.59%, and the Global Dow gave back 0.29%. Only the tech-heavy Nasdaq eked out a 0.03% gain. Earlier in the day, stocks rallied following reports out of China that it would comply with phase one of the trade deal by accelerating purchases of U.S.-exported farm goods. Nevertheless, record increases of COVID-19 reported cases in Florida and Arizona drew stocks back from earlier gains.

For the week, the ups and downs experienced by equities ended with the benchmark indexes closing ahead, led by the Nasdaq, followed by the Russell 2000, the S&P 500, the Global Dow, and the Dow. The yield on 10-year Treasuries closed the week where it began. Year to date, the Nasdaq is safely ahead of last year’s closing value, while the other benchmark indexes have yet to catch up to their respective 2019 year-end marks.

Crude oil prices are back on the upswing after major oil-producing countries agreed to continue to limit output. The week ended with oil prices hovering around $39.50 per barrel by late Friday afternoon, up from the prior week’s price of $36.41. The price of gold (COMEX) continued to climb last week, closing at $1,755.10 by late Friday afternoon, up from the prior week’s price of $1,738.40. The national average retail regular gasoline price was $2.098 per gallon on June 15, 2020, $0.062 higher than the prior week’s price but $0.572 less than a year ago.

Stock Market Indexes

Market/Index 2019 Close Prior Week As of 6/19 Weekly Change YTD Change
DJIA 28,538.44 25,605.54 25,871.46 1.04% -9.35%
Nasdaq 8,972.60 9,588.81 9,946.12 3.73% 10.85%
S&P 500 3,230.78 3,041.31 3,097.74 1.86% -4.12%
Russell 2000 1,668.47 1,387.68 1,418.64 2.23% -14.97%
Global Dow 3,251.24 2,799.51 2,838.87 1.40% -12.68%
Fed. Funds target rate 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.69% 0.69% 0 bps -122 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 News

  • Retail sales spiked in May, advancing 17.7% from the previous month. Sales are down 6.1% from May 2019. Retail trade sales also increased, climbing 16.8% last month. Nonstore (online) retail sales increased 9.0% in May and are up 30.8% since May 2019. Last month, a tremendous spike in sales was seen by some retailers including clothing and clothing accessories stores (188.0%), motor vehicle and parts dealers (44.1%), furniture and home furnishing stores (89.7%), electronics and appliance stores (50.5%), and sporting goods, hobby, musical instrument, and book stores (88.2%).
  • New home construction should be on the rise in June as May saw building permits jump by 14.4%. Housing starts climbed 4.3% last month but housing completions fell by 7.3%, likely due to a scale-back of construction work due to the pandemic.
  • Total industrial production increased 1.4% in May as many factories resumed at least partial operations following suspensions related to the COVID-19 pandemic. Nevertheless, total industrial production remains 15.4% below its February pre-virus level and 15.3% below its May 2019 rate. Manufacturing rebounded from consecutive monthly decreases by advancing 3.8% in May, with most major industries posting increases, the largest of which coming from motor vehicles and parts. Mining and utilities fell 6.8% and 2.3%, respectively.
  • For the week ended June 13, there were 1,508,000 claims for unemployment insurance, a decrease of 58,000 from the previous week’s level, which was revised up by 24,000. According to the Department of Labor, the advance rate for insured unemployment claims was 14.1% for the week ended June 6. The advance number of those receiving unemployment insurance benefits during the week ended June 6 was 20,544,000, a decrease of 62,000 from the prior week’s level, which was revised down by 323,000.

Eye on the Week Ahead

Several important economic reports are out this week. The final estimate for the first-quarter gross domestic product is released this week. It is not expected that much will change from the prior estimate, which had the economy slow at a rate of 5.0%. May home sales figures are also available this week. Existing home sales plunged in April, while new home sales were little changed. The durable goods orders report for May is also out this week. Orders fell more than 17.0% in April. May should show some improvement.

What I’m Watching This Week – 15 June 2020

The Markets (as of market close June 12, 2020)

Last week began with a bang for stocks as each of the indexes gained well over 1.0% for the day. The S&P 500, after climbing 1.2%, has picked up nearly 45.0% since its 2020 low, pushing it into the black for the year. The Nasdaq rose to a record high while the Dow and Russell 2000 surged by close to 2.0% each. Oil prices fell marginally, and the dollar sank, as did the yield on 10-year Treasuries. Investors were encouraged by the prospects of more reopenings, the Federal Reserve’s expansion of its Main Street Lending Program, and the growing sentiment that the economy is reversing course toward expansion. Market sectors leading the way included energy, real estate, airlines, financials, travel and leisure, and retail.

Investors pulled some profits out of stocks last Tuesday, sending each of the benchmark indexes (except the Nasdaq) lower. The Dow fell 1.1%, and the S&P 500 dipped 0.8%. The tech-heavy Nasdaq edged up 0.3% and reached 10,000 for the first time in its history, only to fall back slightly by the end of trading. Oil prices rose, the yield on 10-year Treasuries dropped, and the dollar declined for the ninth straight day.

Equities fell again last Wednesday despite the Fed’s announcement that it would maintain the current target rate range at 0.00%-0.25% and continue to make asset purchases at the current pace. The Dow dropped 1.0%, the S&P 500 lost 0.5%, but the Nasdaq continued to climb, gaining 0.7%. For the first time in several sessions, FAANGs (Facebook, Apple, Amazon, Netflix, and Alphabet Google) posted gains, along with health care and tech stocks.

Stocks plunged dramatically last Thursday as investors sold stocks on news of rising COVID-19 cases coupled with the Federal Reserve’s assessment that the economy will be slow to recover. Each of the indexes listed here fell by at least 5.27%, with the Russell 2000 dropping 7.58% and the Dow plummeting 6.90%. Yields on 10-year Treasuries sank, as did crude oil prices.

Equities rallied from Thursday’s rout, but not enough to prevent an overall week of losses. Stocks posted solid returns last Friday with each of the benchmark indexes listed here posting solid daily gains, led by the Russell 2000, which climbed more than 2.25% on the day. Crude oil prices inched up, as did the yields on 10-year Treasuries.

However, the week was marked by fears of a second virus wave, which sent equities into a tailspin. While stocks rallied Friday, the major indexes lost ground for the week. The small caps of the Russell 2000 were hit the hardest, followed by the Dow, Global Dow, the S&P 500, and the Nasdaq. Year to date, only the Nasdaq remained solidly in the black, while the Russell 2000, the Global Dow, and the Dow continue to lag by more than 10.0%, respectively. Investors exercised caution in light of rising COVID-19 infection rates and an uncertain economic outlook.

For the first time in several weeks, crude oil prices fell, closing the week at $36.41 per barrel by late Friday afternoon, down from the prior week’s price of $39.16. The price of gold (COMEX) soared last week, closing at $1,738.40 by late Friday afternoon, up from the prior week’s price of $1,688.30. For the sixth week in a row, gas prices rose. The national average retail regular gasoline price was $2.036 per gallon on June 8, 2020, $0.062 higher than the prior week’s price but $0.696 less than a year ago.

Stock Market Indexes

Market/Index 2019 Close Prior Week As of 6/12 Weekly Change YTD Change
DJIA 28,538.44 27,110.98 25,605.54 -5.55% -10.28%
Nasdaq 8,972.60 9,814.08 9,588.81 -2.30% 6.87%
S&P 500 3,230.78 3,193.93 3,041.31 -4.78% -5.86%
Russell 2000 1,668.47 1,507.15 1,387.68 -7.93% -16.83%
Global Dow 3,251.24 2,949.64 2,799.51 -5.09% -13.89%
Fed. Funds target rate 1.50%-1.75% 0.00%-0.25% 0.00%-0.25% 0 bps -150 bps
10-year Treasuries 1.91% 0.90% 0.69% -21 bps -122 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 News

  • Following its meeting last week, the Federal Open Market Committee left no doubt that it would use its full range of tools to support the U.S. economy. According to the Committee, the ongoing public health crisis caused by the COVID-19 pandemic will weigh heavily on economic activity, employment, and inflation in the near term, while posing considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0.00%-0.25%. The Committee expects to maintain this rate until it is confident the economy has weathered the recent events, which according to its projections, will run through the year 2022. The Committee also indicated that it would be increasing holdings of Treasuries (currently at $80 billion per month) and residential and commercial mortgage-backed securities (presently at $40 billion per month).
  • The federal deficit was $399 billion in May and sits at $1,880 billion through the first eight months of the fiscal year. Through the same period last fiscal year, the budget deficit was $739 billion. According to the Federal Reserve, the Department of Labor spent $94 billion in May, driven by expanded unemployment benefit payments. Prior to this past April, the high was $17 billion in March 2010. Also, May has been a deficit month 65 times out of 66 fiscal years, since there are no major corporate or individual tax due dates in this month.
  • The Consumer Price Index fell 0.1% in May after declining 0.8% in April. Over the last 12 months, the CPI has increased 0.1%. Price reductions in energy, motor vehicle insurance, airline fares, used cars and trucks, and apparel more than offset price increases in food, recreation, medical care, household furnishings, operations, new vehicles, and shelter. The index less food and energy fell 0.1% in May, its third consecutive monthly decline. This is the first time this index has ever declined in three consecutive months.
  • Prices at the producer level increased in May. According to the latest report from the Bureau of Labor Statistics, the Producer Price Index rose 0.4% last month and is up 0.8% for the 12 months ended in May. This is the first monthly increase in producer prices in the last 3 months. The increase in producer prices in May is attributable to a 1.6% hike in goods prices, which saw food prices spike 6.0% and energy prices climb 4.5%. On the other hand, prices for services fell 0.2% in May, the same decline as in April.
  • Prices for U.S. imports increased 1.0% in May after declining 2.6% in April and 2.4% in March. The May advance was led by higher fuel prices, which increased by 20.5%. The May jump in fuel prices was the largest monthly advance in the history of the index. The price index for U.S. exports rose 0.5% in May following a 3.3% drop the previous month.
  • According to the latest Job Openings and Labor Turnover report, April saw total separations fall by 4.8 million from March. Despite the decline, April’s level of total separations is the second highest in series history. Job openings decreased to 5.0 million, and hires declined to 3.5 million, a series low. The changes in these measures reflect the effects of the COVID-19 pandemic and efforts to contain it.
  • For the week ended June 6, there were 1,542,000 claims for unemployment insurance, a decrease of 355,000 from the previous week’s level, which was revised up by 20,000. According to the Department of Labor, the advance rate for insured unemployment claims decreased 0.2 percentage point to 14.4% for the week ended May 30. The advance number of those receiving unemployment insurance benefits during the week ended May 30 was 20,929,000, a decrease of 339,000 from the prior week’s level, which was revised down by 219,000.

Eye on the Week Ahead

This week is relatively slow with respect to market-moving economic reports. However, one entry that bears watching is the Federal Reserve’s report on industrial production for May. April saw overall production regress by 11.2%, and manufacturing fall by 13.7%. With partial easing of COVID-related restrictions, May’s production numbers should be better.