Tag: business

The Markets (as of market close July 12, 2024)

Investors were encouraged by the most recent inflation data, raising expectations of an interest rate cut in September. Each of the benchmark indexes listed here closed the week in the black, led by the Russell 2000. The small-cap index recorded its best weekly performance since October 2023, while reaching its highest level since January 2022. The expectation of falling interest rates and economic strengthening likely prompted the market shift to more interest-sensitive small- and mid-cap stocks. The Dow rose above 40,000 at one point on Friday, ultimately closing at 40,000. The S&P 500 climbed above 5,600. Crude oil prices slipped lower. While prices at the pump may have risen nationally last week, as of July 1, weekly U.S. average gasoline prices actually declined $0.19 per gallon since the 2024 high on April 22, falling to $3.48/gallon on July 1, $0.05 per gallon less than the price a year ago. Increasing gasoline inventories, relatively weak demand, and oil prices below recent peaks contributed to falling gasoline prices.

Wall Street began the week with mixed results last Monday. The Nasdaq (0.3%) and the S&P 500 (0.1%) reached new record highs. The small caps of the Russell 2000 led the benchmark indexes listed here, climbing 0.6%. The Dow and the Global Dow dipped 0.1%. Ten-year Treasury yields inched lower to 4.26%. Crude oil prices fell $0.90 to $82.26 per barrel. The dollar edged up 0.1%, while gold prices fell 1.3%. Not surprisingly, the market sectors were also mixed last Monday. Information technology outperformed, while communication services fell over 1.0%.

Stocks were mixed last Tuesday. While the Nasdaq and the S&P 500 ticked up a mere 0.1%, it was enough to reach new record highs for both indexes. The Russell 2000, which had enjoyed a solid session the previous day, was unable to maintain that momentum after falling 0.5%. The Global Dow lost 0.3%, while the Dow dipped 0.1%. Fed Chair Jerome Powell spoke before the Senate last Tuesday and noted that more favorable data showing signs of cooling inflation could prompt the Fed to lower interest rates. Yields on 10-year Treasuries edged up to 4.30%. Crude oil prices fell for the second straight day, settling at about $81.59 per barrel. The dollar and gold prices moved higher.

The Nasdaq (1.2%) and the S&P 500 (1.0%) stretched their respective streaks of record highs to five straight sessions last Wednesday. This was the 37th record close for the S&P 500 in 2024 as it climbed above 5,600 for the first time in its history. The Dow and the Russell 2000 gained 1.1%, while the Global Dow advanced 0.6%. Big tech and AI stocks helped drive the market surge, while investors took encouragement from Fed Chair Jerome Powell’s comments to the House Financial Services Committee. Ten-year Treasury yields fell to 4.28%. Crude oil prices reversed a period of declines, rising to $82.38 per barrel. The dollar slid 0.1%, while gold prices rose 0.4%.

The market was mixed last Thursday. The Russell 2000 gained 3.6%, the Global Dow rose 0.5%, and the Dow inched up 0.1%. The streak of record highs ended for the Nasdaq (-2.0%) and the S&P 500 (-0.9%). Megacap tech shares declined the furthest in over a year as investors, believing the Fed may cut interest rates as early as September, began to reshuffle their holding. Bond values increased, pulling yields lower, with the 10-year Treasury note falling to 4.19%. Crude oil prices jumped $0.74 to $82.84 per barrel. The dollar fell 0.6%, while gold prices rose 1.7%.

Stocks ended the week on a high note, with each of the benchmark indexes listed here posting gains last Friday. The Russell 2000 enjoyed another notable day of gains after climbing 1.1%. The Nasdaq, the S&P 500, and the Dow added 0.6%. The Global Dow gained 0.5%. Ten-year Treasury yields ticked lower for the third straight session, ending the day and the week at 4.18%. Crude oil prices fell $0.34 per barrel last Friday. The dollar and gold prices also closed the day lower.

Stock Market Indexes

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

• In what is most likely good news for investors looking for the Fed to lower interest rates, the June Consumer Price Index declined 0.1%. This is the first time since May 2020 that the CPI registered less than 0% for a month. Prices rose 3.0% over the last 12 months, a smaller increase than the 3.3% advance for the 12 months ended May. A 0.2% increase in prices for shelter was offset by a 2.0% drop in energy prices, within which gasoline prices declined 3.8%. Prices for shelter, which accounts for about one-third of the CPI basket of goods and services, have displayed a slowdown in price increases over the past few months. For the 12 months ended in June, prices for shelter rose 5.2%, down from 5.4% for the 12 months ended in May. Food prices rose 0.2% in June. Consumer prices less food and energy rose 0.1% in June after rising 0.2% the preceding month. Prices less food and energy rose 3.3% over the last 12 months, which was the smallest 12-month increase since April 2021.
• Prices at the producer level advanced 0.2% in June after being unchanged in the previous month. Producer prices rose 2.6% for the 12 months ended in June, the largest advance since March 2023. The June rise in producer prices could be traced to a 0.6% increase in prices for services. In contrast, prices for goods decreased 0.5%. Nearly all the June increase in prices for services was attributable to a 1.9% jump in margins for trade services (the difference between wholesale and retail prices). Prices less foods, energy, and trade services were unchanged in June following a 0.2% advance in May. For the 12 months ended in June, prices less foods, energy, and trade services moved up 3.1%.
• The Treasury budget deficit for June was $66.0 billion, well below the May deficit of $348.0 billion. For the current fiscal year, the total deficit is $1,268.3 trillion. The deficit over the same period in the last fiscal year was $1,393.0 trillion.
• The national average retail price for regular gasoline was $3.489 per gallon on July 8, $0.010 per gallon above the prior week’s price but $0.057 per gallon less than a year ago. Also, as of July 8, the East Coast price rose $0.061 to $3.450 per gallon; the Midwest price decreased $0.048 to $3.367 per gallon; the Gulf Coast price fell $0.013 to $3.058 per gallon; the Rocky Mountain price increased $0.080 to $3.431 per gallon; and the West Coast price declined $0.010 to $4.226 per gallon.
• For the week ended July 6, there were 222,000 new claims for unemployment insurance, a decrease of 17,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended June 29 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended June 29 was 1,852,000, a decrease of 4,000 from the previous week’s level, which was revised down by 2,000. States and territories with the highest insured unemployment rates for the week ended June 22 were New Jersey (2.4%), California (2.2%), Minnesota (2.1%), Puerto Rico (2.1%), Rhode Island (2.0%), Connecticut (1.8%), Pennsylvania (1.8%), Illinois (1.7%), Massachusetts (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended June 29 were in New York (+4,427), New Jersey (+2,557), Georgia (+1,849), California (+1,478), and Iowa (+1,270), while the largest decreases were in Connecticut (-1,831), Wisconsin (-875), Minnesota (-731), Maryland (-690), and Vermont (-534).

Eye on the Week Ahead

The retail sales report for June is available this week. Sales of goods and services to consumers ticked up 0.1% in May and 2.3% over the past 12 months. Another important report to consider this week is the Federal Reserve’s index of industrial production for June. Industrial production and manufacturing rose 0.9% in May. Overall, industrial production is up 0.4% from May 2023, while manufacturing is up 0.1%.

The Markets (as of market close June 28, 2024)

Stocks closed generally higher for the week, with the Russell 2000, the Nasdaq, and the Global Dow posting gains, while the large caps of the Dow and the S&P 500 declined. Ten-year Treasury yields rose as bond prices fell. Crude oil prices gained about $1.00 per barrel. The dollar and gold prices inched higher. Investors are most likely reassessing their positions following the presidential debate between Joe Biden and Donald Trump. The majority of the market sectors declined last week, with utilities and materials falling the most. Consumer discretionary, communication services, and energy outperformed.

The week began with mixed results as the Nasdaq (-1.1%) and the S&P 500 (-0.3%) declined as a major AI company extended its losses for a third consecutive session, dragging the tech sector lower. The Dow (0.7%), the Global Dow (0.6%), and the Russell 2000 (0.5%) moved higher. Along with information technology, consumer discretionary was the only other sector to close in the red. The remaining market sectors gained ground, led by energy and utilities. Ten-year Treasury yields inched down to 4.24%. Crude oil prices closed at about $81.67 per barrel after gaining 1.2%. The dollar dipped 0.3%, while gold prices rose 0.6%.

The AI rally resumed last Tuesday, pushing the Nasdaq (1.3%) and the S&P 500 (0.4%) higher. The Dow gave back most of the prior day’s gains after falling 0.8%. The Russell 2000 (-0.4%) edged lower while the Global Dow inched lower by less than 0.1%. Yields on 10-year Treasuries dipped to 4.23%. Crude oil prices reversed the previous day’s gains after declining $0.90 to $80.77 per barrel. The dollar eked out a 0.2% gain, while gold prices fell 0.6%.

Once again, the market was mixed last Wednesday. The Nasdaq (0.5%) and the S&P 500 (0.2%) advanced for the second straight session. The Dow gained less than 0.1%. The Russell 2000 and the Global Dow fell 0.2%. Consumer discretionary outperformed among the market sectors, while energy and financials lagged. Bond prices declined, pushing yields higher, as 10-year Treasuries gained 7.8 basis points to close at 4.31%. Crude oil prices slipped to $80.66 per barrel. The dollar rose 0.4%, while gold prices dipped 0.9%.

Stocks closed higher last Thursday led by the Russell 2000, which gained 1.0%. The Nasdaq added 0.3%, while the Dow and the S&P 500 inched up 0.1%. The Global Dow dipped 0.2%. Ten-year Treasury yields dipped 2.8 basis points to settle at 4.28%. Crude oil prices rose nearly $1.00 to $81.86 per barrel. The dollar dipped 0.1%, while gold prices advanced 1.0%.

Friday’s stock performance was lackluster, with each of the benchmark indexes listed here closing lower, except for the small caps of the Russell 2000, which gained 0.4%. The Nasdaq lost 0.7%, followed by the S&P 500 (-0.4%) and the Dow (-0.1%). The Global Dow fell less than 0.1%. Ten-year Treasury yields rose 5.5 basis points to close at 4.34%. Crude oil prices fell $0.40 per barrel. The dollar was flat, while gold prices slipped 0.1%.

Stock Market Indexes

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 first-quarter gross domestic product revealed that the economy accelerated at an annual rate of 1.4%. In the fourth quarter, GDP increased by 3.4%. Compared to the fourth quarter, the reduction in GDP primarily reflected decelerations in consumer spending, exports, and state and local government spending, and a downturn in federal government spending. These decreases were partly offset by an acceleration in residential fixed investment. Imports, which are a negative in the calculation of GDP, accelerated. The personal consumption expenditures (PCE) price index increased 3.4%, an upward revision of 0.1 percentage point from the fourth quarter. Excluding food and energy prices, the PCE price index increased 3.7%, also 0.1 percentage point above the fourth-quarter estimate.
• In what will likely give rise to hopes that the Federal Reserve will lower interest rates in the third quarter, consumer prices were unchanged in May, according to the latest personal consumption expenditures (PCE) price index. Core prices (less food and energy) ticked up 0.1% last month. Year over year, both the PCE price index and the core PCE price index rose 2.6%, a reduction of 0.1% and 0.2%, respectively, from the same period ended in April. Consumer spending inched up 0.2% in May, while personal income rose 0.5%, largely attributable to a 0.7% rise in wages and salaries.
• The advance estimate of international trade in goods showed the trade deficit rose by 2.7% in May. Exports declined 2.7%, while imports fell 0.7%.
• New orders for durable goods inched up 0.1% in May following a downwardly revised 0.2% increase in April. Excluding transportation, orders for durable goods ticked down 0.1%. Excluding defense, new orders decreased 0.2%. Transportation equipment, up three of the last four months, drove the overall increase in new orders, increasing 0.6%.
• Sales of new single-family homes declined 11.3% in May and 16.5% under the May 2023 estimate. The median sales price of new houses sold in May was $417,400. The average sales price was $520,000. Inventory of new single-family homes for sale in May represented a 9.3-month supply at the current sales pace.
• The national average retail price for regular gasoline was $3.438 per gallon on June 24, $0.003 per gallon above the prior week’s price but $0.133 per gallon less than a year ago. Also, as of June 24, the East Coast price rose $0.006 to $3.363 per gallon; the Midwest price increased $0.008 to $3.323 per gallon; the Gulf Coast price advanced $0.024 to $3.016 per gallon; the Rocky Mountain price declined $0.034 to $3.296 per gallon; and the West Coast price fell $0.025 to $4.268 per gallon.
• For the week ended June 22, there were 233,000 new claims for unemployment insurance, a decrease of 6,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended June 15 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended June 15 was 1,839,000, an increase of 18,000 from the previous week’s level, which was revised down by 7,000. This is the highest level for insured unemployment since November 27, 2021, when it was 1,878,000. States and territories with the highest insured unemployment rates for the week ended June 8 were New Jersey (2.2%), California (2.1%), Minnesota (1.8%), Washington (1.7%), Illinois (1.6%), Massachusetts (1.6%), Nevada (1.6%), Pennsylvania (1.6%), Rhode Island (1.6%), New York (1.5%), and Puerto Rico (1.5%). The largest increases in initial claims for unemployment insurance for the week ended June 15 were in Connecticut (+2,168), Wisconsin (+1,262), Texas (+1,017), New Jersey (+962), and Maryland (+756), while the largest decreases were in California (-4,298), Minnesota (-1,474), Illinois (-1,466), New York (-1,193), and Florida (-1,134).

Eye on the Week Ahead

The jobs report for May is out this week. Employment picked up in April, with 272,000 estimated new jobs added. Strength in the labor sector supports the Federal Reserve’s restrictive monetary policy, particularly relative to interest rates.

The Markets (as of market close June 21, 2024)

Wall Street rode a rally in tech and AI stocks for most of last week. The end of the week saw a bit of a downturn, but not enough to keep the benchmark indexes listed here from closing the week higher. The large caps of the Dow led the indexes, followed by the Russell 2000, the Global Dow, and the S&P 500. The Nasdaq inched higher. Despite a dip at the end of the week, crude oil prices posted a second straight weekly gain. Ten-year Treasury yields rose higher after positive economic data prompted the Federal Reserve to refrain from cutting interest rates in the third quarter. The market sectors mostly advanced last week, led by consumer discretionary, financials, and communication services. Utilities declined, while information technology ticked lower.

Monday saw megacaps rally, pushing both the S&P 500 and the Nasdaq to new record highs. Each of the benchmark indexes listed here posted gains, led by the Nasdaq, which advanced 1.0%, while the S&P 500 and the Russell 2000 rose 0.8%. The Dow gained 0.5% and the Global Dow climbed 0.4%. Ten-year Treasury yields added 6.6 basis points to close at 4.27%. Crude oil prices broke the $80.00 per barrel mark after gaining $2.17 to reach $80.62 per barrel. The dollar (-0.2%) and gold prices (-0.7%) slid.

Stocks continued to rally last Tuesday as both the S&P 500 and the Nasdaq again reached record highs. The Global Dow (0.6%) led the benchmark indexes listed here followed by the S&P 500 (0.3%). The Dow and the Russell 2000 gained 0.2%, while the Nasdaq eked out a 0.03% advance. The yield on 10-year Treasuries fell 6.2 basis points to 4.21%. Crude oil prices rose to $81.46 per barrel. The dollar slipped 0.1%, while gold prices gained 0.7%.

The stock market was closed last Wednesday for Juneteenth, which gave investors a chance to review and reset. Thursday saw a pullback in tech megacaps, as investors captured recent gains, which led to a decline in the Nasdaq (-0.8%) and the S&P 500 (-0.3%). The small caps of the Russell 2000 also fell, dropping 0.4%. The Dow advanced 0.8% and the Global Dow rose 0.2%. Yields on 10-year Treasuries inched up to 4.25%. Crude oil prices continued to climb higher, gaining nearly 1.0% to $82.34 per barrel. The dollar rose 0.4% and gold prices gained 1.1%.

Stocks declined last Friday to close out the week. The Global Dow fell 0.5%, the Nasdaq and the S&P 500 dipped 0.2%, while the Russell 2000 rose 0.2%. The Dow was essentially flat. Ten-year Treasury yields ended the day where they began. Crude oil prices rose $0.64 to $80.65 per barrel. The dollar inched up 0.2%, while gold prices fell 1.4%.

Stock Market Indexes

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 inched up 0.1% in May and 2.3% above May 2023. Retail trade sales were up 0.2% last month and 2.0% above May 2023. Nonstore retailer sales were up 0.8% in May and 6.8% over the last 12 months. Sales at food services and drinking places fell 0.4% in May but were up 3.8% from May 2023.
• Industrial production rose 0.9% in May. Manufacturing output posted a similar gain of 0.9% last month after declining in each of the previous two months. Mining increased 0.3% in May, and utilities advanced 1.6%. Total industrial production in May was 0.4% higher than its year-earlier level.
• The number of issued residential building permits fell 3.8% in May and 9.5% from a year ago. The number of issued building permits has not increased since February. Building permits for single family homes declined 2.9% last month. Housing starts fell 5.5% last month and 19.4% below the May 2023 estimate. Single-family housing starts in May were 5.2% under the April estimate. Housing completions also declined last month, falling 8.4%. However, residential completions were 1.0% above the May 2023 figure. Single-family housing completions were down 8.5% for the month.
• Sales of existing homes declined 0.7% in May and 2.8% over the last 12 months. Unsold inventory sat at a 3.7-month supply at the current sales pace, up from 3.5 months in April and 3.1 months in May 2023. The median price for existing homes in May was $419,300, the highest price ever recorded and an increase of 3.1% from April ($406,600) and up 5.8% from one year ago ($396,500). According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.87% as of June 20, down from 6.95% the prior week but up from 6.67% one year ago. Sales of single family homes declined 0.8% from April and 2.1% from the prior year. The median existing single-family home price was $424,500 in May, up from $411,100 in April and well above the May 2023 estimate of $401,500.
• The national average retail price for regular gasoline was $3.435 per gallon on June 17, $0.006 per gallon above the prior week’s price but $0.142 per gallon less than a year ago. Also, as of June 17, the East Coast price fell $0.013 to $3.357 per gallon; the Midwest price increased $0.053 to $3.315 per gallon; the Gulf Coast price rose $0.041 to $2.992 per gallon; the Rocky Mountain price advanced $0.067 to $3.330 per gallon; and the West Coast price declined $0.078 to $4.293 per gallon.
• For the week ended June 15, there were 238,000 new claims for unemployment insurance, a decrease of 5,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended June 8 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended June 8 was 1,828,000, an increase of 15,000 from the previous week’s level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended June 1 were New Jersey (2.3%), California (2.2%), Washington (1.8%), Rhode Island (1.6%), Illinois (1.5%), Massachusetts (1.5%), Minnesota (1.5%), Nevada (1.5%), New York (1.5%), and Pennsylvania (1.5%). The largest increases in initial claims for unemployment insurance for the week ended June 8 were in California (+9,793), Minnesota (+4,397), Pennsylvania (+4,131), Texas (+2,309), and Illinois (+2,265), while the largest decreases were in North Dakota (-746), Missouri (-508), Tennessee (-279), Kansas (-245), and Idaho (-175).

Eye on the Week Ahead

The final and most complete edition of the gross domestic product report for the first quarter is out this week. Thus far, data has shown that the economy accelerated at an annualized rate of 1.3%. Also available this week is the report on personal income and outlays for May. April saw income rose 0.3%, while consumer prices increased 0.3% for the month and 2.7% over the 12 months ended in April.

The Markets (as of market close June 7, 2024)

Despite a dip at the end of the week, stocks closed last week generally higher, with the exception of the economically sensitive small caps of the Russell 2000. A robust jobs report at the end of last week may have alleviated concerns about an economic slowdown, but it also strengthened the Fed’s case to refrain from lowering interest rates until inflation recedes. Nevertheless, both the S&P 500 and the Nasdaq recorded fresh records. Among the market sectors, information technology, health care, communication services, and consumer staples performed well, while utilities, energy, and materials ended the week in the red. With the likelihood of a rate cut diminishing, bond prices fell, driving yields higher. The dollar also benefited from the jobs report, climbing higher against a basket of currencies.

Wall Street began the week on a sluggish note, picking up where it left off the previous week. The Nasdaq flip-flopped for much of the day before closing up 0.6%, indicative of the volatility that ensued for much of the day. The Global Dow gained 0.4% and the S&P 500 edged up 0.1%. The Russell 2000 fell 0.5% and the Dow lost 0.3%. Energy, financials, and industrials were the poorest performing sectors, while information technology and health care scored gains. The yield on 10-year Treasuries fell 11.0 basis points to 4.40%, a two-week low. Crude oil prices dropped more than 3.0% to $74.04 per barrel, its lowest point in four months after OPEC+ announced a plan to gradually ease some of its production cuts. The dollar fell 0.5%, while gold prices rose 1.0%.

The three major indexes, the Dow (0.4%), the S&P 500 (0.2%), and the Nasdaq (0.2%) eked out gains last Tuesday, while the Russell 2000 (-1.2%) and the Global Dow (-0.3%) lost value. Real estate and consumer staples gained the most among the market sectors, while energy and materials fell the furthest. Ten-year Treasury yields fell to 4.33%, the lowest in nearly three weeks, as investors see recent economic data as leading to the Fed possibly cutting interest rates as early as September. Crude oil prices continued to decline, falling $0.89 to $73.33 per barrel. The dollar was unchanged, while gold prices declined 1.0%.

A tech rally last Wednesday helped propel the Nasdaq (2.0%) and the S&P 500 (1.2%) to record highs. Among the remaining benchmark indexes listed here, the Russell 2000 advanced 1.5%, the Dow rose 0.3%, and the Global Dow gained 0.2%. Yields on 10-year Treasuries fell 4.7 basis points to 4.28%. Crude oil prices advanced for the first time in several sessions, gaining $0.90 to $74.15 per barrel. The dollar eked out a 0.2% gain, while gold prices advanced 1.2%.

Stocks closed generally lower last Thursday. The S&P 500 and the Nasdaq dipped less than 0.1%. The Russell 2000 fell 0.7%. The Global Dow and the Dow gained 0.4% and 0.2%, respectively. Initial jobless claims rose more than expected (see below) as investors awaited Friday’s employment report for May. Ten-year Treasury yields stayed at 4.28%. Crude oil prices rose for the second straight day, up $1.59 to $75.66 per barrel. The dollar slipped 0.2%, while gold prices advanced for the third day out of the last four after gaining 0.83%.

A strong jobs report last Friday dampened investors’ hopes of an interest rate reduction by the Fed. Stocks closed lower on the day, with the Russell 2000 falling 1.1% to lead the downturn. The Global Dow lost 0.4%, the Dow and the Nasdaq slid 0.2%, while the S&P 500 dipped 0.1%. The yield on 10-year Treasuries jumped nearly 15.0 basis points to 4.43%. Crude oil prices declined for the first time in three days, falling $0.31 to $75.24 per barrel. The dollar rose 0.8%, while gold prices dropped 3.4%.

Stock Market Indexes

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

• Employment rose by a higher-than-expected 272,000 in May after a net downward revision of 15,000 in the prior two months. The unemployment rate ticked up 0.1 percentage point to 4.0%. The number of unemployed rose by 157,000 to 6.6 million. A year earlier, the jobless rate was 3.7%, and the number of unemployed people was 6.1 million. In May, the labor force participation rate fell 0.2 percentage point to 62.5%, while the employment-population ratio dipped 0.1 percentage point to 60.1%. In May, employment trended up in health care; government; leisure and hospitality; and professional, scientific, and technical services. The number of long-term unemployed (those jobless for 27 weeks or more) rose 100,000 to 1.4 million, which accounted for 20.7% of all unemployed people. In May, average hourly earnings increased by $0.14, or 0.4%, to $34.91. Over the past 12 months, average hourly earnings have increased by 4.1%. The average workweek was unchanged at 34.3 hours in May.
• The S&P Global US Manufacturing Purchasing Managers’ Index™ (PMI®) rose to 51.3 in May, above the April estimate of 50.0. The May reading indicated a modest improvement in the health of the manufacturing sector. Helping to drive the rise in the PMI was an increase in new orders, which supported faster expansion in production, the hiring of additional staff, and an overall rise in business confidence. However, costs of production quickened to the fastest pace in over a year, with companies raising their selling prices in response.
• The S&P Global US Services PMI® Business Activity Index rose to a one-year high of 54.8 in May, up sharply from the April reading of 51.3. The increase in business activity reflected a renewed expansion of new orders. Despite the increase in business activity, there was a reduction in employment as service providers were reluctant to replace departing staff. Service providers saw an increase in input costs as wages rose for existing workers and the rate of inflation quickened from the prior month, prompting an increase in prices for services provided.
• The number of job openings fell by nearly 300,000 to 8.1 million in April, according to the latest Job Openings and Labor Turnover Summary. This measure was down by 1.8 million from last year. In April, the number of hires was little changed at 5.6 million. The number of total separations in April was 5.4 million, while the number of quits was 3.5 million. In April, the number of layoffs and discharges was 1.5 million.
• According to the latest report from the Bureau of Economic Analysis, the international trade in goods and services deficit was $74.6 billion in April, up $6.0 billion, or 8.7%, from the March estimate. April exports were $263.7 billion, $2.1 billion, or 0.8%, more than March exports. April imports were $338.2 billion, $8.0 billion, or 2.4%, more than March imports. Year to date, the goods and services deficit increased $5.5 billion, or 2.0%, from the same period in 2023. Exports increased $32.2 billion, or 3.2%. Imports increased $37.8 billion, or 2.9%. Over the first quarter of 2024, the United States showed trade surpluses, in billions of dollars, with South and Central America ($19.7), Netherlands ($18.4), Singapore ($8.8), Australia ($8.4), Hong Kong ($7.2), Brazil ($6.4), United Kingdom ($4.1), Switzerland ($3.5), Saudi Arabia ($2.7), and Belgium ($2.5). Deficits were recorded, in billions of dollars, with China ($61.8), Mexico ($43.5), European Union ($38.5), Vietnam ($27.2), Germany ($22.5), Japan ($16.4), Taiwan ($14.7), South Korea ($13.5), Italy ($11.7), India ($11.3), Canada ($7.6), Malaysia ($5.9), France ($4.9), Ireland ($3.9), and Israel ($1.5).
• The national average retail price for regular gasoline was $3.516 per gallon on June 3, $0.061 per gallon below the prior week’s price and $0.025 per gallon less than a year ago. Also, as of June 3, the East Coast price fell $0.042 to $3.443 per gallon; the Midwest price decreased $0.110 to $3.349 per gallon; the Gulf Coast price declined $0.067 to $3.045 per gallon; the Rocky Mountain price increased $0.006 to $3.360 per gallon; and the West Coast price declined $0.084 to $4.487 per gallon.
• For the week ended June 1, there were 229,000 new claims for unemployment insurance, an increase of 8,000 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 for the week ended May 25 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended May 25 was 1,792,000, an increase of 2,000 from the previous week’s level, which was revised down by 1,000. States and territories with the highest insured unemployment rates for the week ended May 18 were New Jersey (2.3%), California (2.1%), Washington (1.8%), Massachusetts (1.6%), Rhode Island (1.6%), Illinois (1.5%), Nevada (1.5%), New York (1.5%), Alaska (1.4%), Pennsylvania (1.4%), and Puerto Rico (1.4%). The largest increases in initial claims for unemployment insurance for the week ended May 25 were in Tennessee (+1,880), Michigan (+1,557), Missouri (+839), Minnesota (+756), and Illinois (+750), while the largest decreases were in California (-1,065), Pennsylvania (-818), Ohio (-546), New York (-463), and Florida (-336).

Eye on the Week Ahead

The Federal Open Market Committee meets this week. While it is highly unlikely that the Committee will adjust interest rates lower, the meeting statement and subsequent Chairman’s presser may offer some insight into the direction the FOMC is likely to head over the next several months. The Consumer Price Index for May is out this week. Consumer prices rose 0.3% in April and 3.4% over the past 12 months, well above the Fed’s 2.0% target rate.

The Markets (as of market close May 31, 2024)

Equities generally closed lower by the end of the week with, the Nasdaq and the Dow falling furthest among the benchmark indexes listed here. The Russell 2000 and the Global Dow were flat. Investors spent the week assessing the first-quarter gross domestic product, jobless claims, and corporate earnings data. Ten-year Treasury yields rose as bond prices dipped, on hawkish comments from Federal Reserve officials and a weaker Treasury auction. Crude oil prices dipped and prices at the pump dipped lower. Utilities led the market sectors, with energy and real estate outperforming. Health care, industrials, and information technology closed in the red.

Stocks opened mixed to begin the holiday-shortened week. The Nasdaq reached another record high after gaining 0.6%, while the S&P 500 ticked up less than 0.1%. The Dow fell 0.6%, the Global Dow lost 0.2%, and the Russell 2000 dipped 0.1%. Ten-year Treasury yields rose 7.5 basis points to 4.54%. Investors reacted to Federal Reserve officials who maintained a hawkish stance and would not rule out another rate hike if inflationary pressures accelerated. Ten-year bond yields jumped following weak Treasury auctions of two- and five-year notes. A surge in stock values of a major chip maker helped drive up the Nasdaq. Crude oil prices climbed $2.45 to $80.17 per barrel amid speculation that OPEC+ would extend output cuts into the second half of the year. The dollar was flat, while gold prices rose 1.1%.

Wall Street endured another rough day last Wednesday as rising bond yields continued to cut into a preference for stocks. The small caps of the Russell 2000 lost 1.5%, the Global Dow dropped 1.4%, the Dow fell 1.1%, the S&P 500 declined 0.7%, and the Nasdaq fell 0.6%. On the other hand, 10-year bond yields climbed to 4.62%, reflective of a disappointing government debt auction. Crude oil prices fell to $79.00 per barrel. The dollar gained 0.5%, while gold prices fell 0.8%.

The markets closed last Thursday mostly lower, with the Nasdaq (-1.1%), the Dow (-0.87%), and the S&P 500 (-0.6%) losing value, while the Russell 2000 (+1.0%) and the Global Dow (+0.3%) advanced. Ten-year Treasury yields ended a streak of gains, falling 7.0 basis points to 4.55%. Crude oil prices fell to $77.93 per barrel. The dollar declined 0.3%, and gold prices dipped 0.1%. Tech and consumer shares led the overall market downturn after the first-quarter GDP was revised down to 1.3% (see below).

Stocks rebounded last Friday, led by the Dow, which advanced 1.5%. The S&P 500 and the Global Dow rose 0.8%, the Russell 2000 advanced 0.7%, while the Nasdaq was unchanged. Ten-year Treasury yields fell 4.0 basis points to 4.51%. Crude oil prices decreased about $0.70 per barrel. The dollar lost 0.1%, while gold prices fell 0.7%.

Stock Market Indexes

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

• Gross domestic product increased at an annual rate of 1.3% in the first quarter of 2024, according to the second estimate from the Bureau of Economic analysis. In the fourth quarter, GDP rose 3.4%. April’s initial, or advance, estimate showed first-quarter GDP rose 1.6%. A downward revision to consumer spending largely accounted for the decrease. Compared to the fourth quarter, the personal consumption expenditures (PCE) price index increased 3.3%, a downward revision of 0.1 percentage point. Excluding food and energy prices, the PCE price index increased 3.6%, a downward revision of 0.1 percentage point. In the first quarter, consumer spending rose 2.0%, nonresidential fixed investment advanced 3.3%, and residential fixed investment climbed 15.4%. Exports increased 1.2%, while imports, which are a negative in the calculation of GDP, increased 7.7%.
• Personal income advanced 0.3% in April, while disposable (after-tax) income rose 0.2%. Consumer spending slowed significantly in April, falling from 0.7% in both February and March, to 0.2% in April. Consumer prices for goods and services increased 0.3% in April for the third consecutive month. Excluding food and energy, prices rose 0.2%. Since April 2023, consumer prices advanced 2.7%, unchanged from the previous 12-month period. Prices less food and energy climbed 2.8%.
• The international trade in goods deficit was $99.4 billion in April, up $7.1 billion from $92.3 billion in March. Exports of goods for April were $169.9 billion, $0.9 billion more than March exports. Imports of goods for April were $269.3 billion, $8.0 billion more than March imports.
• The national average retail price for regular gasoline was $3.577 per gallon on May 27, $0.007 per gallon below the prior week’s price but $0.006 per gallon more than a year ago. Also, as of May 27, the East Coast price rose $0.010 to $3.485 per gallon; the Midwest price increased $0.027 to $3.459 per gallon; the Gulf Coast price decreased $0.001 to $3.112 per gallon; the Rocky Mountain price decreased $0.076 to $3.354 per gallon; and the West Coast price declined $0.053 to $4.571 per gallon.
• For the week ended May 25, there were 219,000 new claims for unemployment insurance, an increase of 3,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended May 18 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended May 18 was 1,791,000, an increase of 4,000 from the previous week’s level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended May 11 were New Jersey (2.3%), California (2.2%), Illinois (1.6%), Massachusetts (1.6%), Nevada (1.6%), New York (1.6%), Rhode Island (1.6%), Washington (1.6%), Alaska (1.5%), and Pennsylvania (1.4%). The largest increases in initial claims for unemployment insurance for the week ended May 18 were in Texas (+798), Michigan (+775), Missouri (+461), Oklahoma (+334), and New Jersey (+310), while the largest decreases were in California (-2,460), Indiana (-1,105), New York (-626), Florida (-612), and Minnesota (-522).

Eye on the Week Ahead

The manufacturing and services surveys for May are out this week. April saw growth in both sectors slow. The employment figures for May are also available this week. April saw a significant downturn in the number of new jobs added, leading to guarded optimism that the Fed may be more inclined to lower interest rates.

The Markets (as of market close May 24, 2024)

Tech shares, particularly AI stocks, helped push the Nasdaq, and to a much lesser extent, the S&P 500 higher last week. The Dow, the Russell 2000, and the Global Dow declined. During a week when volume was relatively light, investors latched onto favorable corporate earnings data from some major tech and AI companies. Among the market sectors, only information technology and communication services closed higher. Real estate and energy fell the furthest. Treasury yields inched higher, while crude oil prices fell 2.74%, yet remain up 9.1% year to date. Gold prices, which had been soaring, had their worst week in a while, although they are up nearly 13.0% from the beginning of the year.

Wall Street kicked off last week on a high note, with the Nasdaq securing a new record high. Each of the benchmark indexes listed here gained ground by the close of trading, with the exception of the Dow, which lost 0.5%. Technology led the market sectors, while consumer discretionary and energy fell the most. Ten-year Treasury yields inched up 1.7 basis points to close at 4.43%. Crude oil prices fell $0.35 to settle at about $79.71 per barrel. The dollar and gold prices advanced.

Stocks ended last Tuesday with mixed results. The Russell 2000 fell 0.2%, while the Global Dow was flat. However, the S&P 500 gained 0.3%, and both the Nasdaq and the Dow advanced 0.2%. The S&P 500 and the Nasdaq reached new record highs, while the Dow finished near its record level. Investors saw favorable earnings data from several retailers, while trying to gauge when the Fed might begin cutting interest rates. Yields on 10-year Treasuries dipped to 4.41%. Crude oil prices slid $0.75 to $79.08 per barrel. The dollar gained about 0.1%, while gold prices fell 0.5%.

The benchmark indexes listed here fell back last Wednesday. Investors awaited earnings data from a major AI company, while digesting the minutes from the last Federal Reserve meeting, in which some officials indicated a willingness to hike rates if necessary. The Russell 2000 fell the furthest (-0.8%), followed by the Dow and the Global Dow (-0.5%), the S&P 500 (-0.3%), and the Nasdaq (-0.2%). Ten-year Treasury yields rose 2.0 basis points to close at 4.43%. Crude oil prices declined for the third straight session after falling $1.32 to $77.34 per barrel. The dollar rose 0.3%, while gold prices dipped 1.8%.

The markets closed lower last Thursday as rising bond yields weighed on stocks. Once again, the Russell 2000 led the declines after falling 1.6%. The Dow lost 1.5%, the S&P 500 and the Global Dow dipped 0.7%, while the Nasdaq decreased 0.4%. Ten-year Treasury yields climbed to 4.47% after adding 4.1 basis points. Crude oil prices fell for the fourth straight day, losing $0.70 to settle at $76.87 per barrel. The dollar inched up 0.1%, while gold prices fell 2.5%.

Stocks closed higher ahead of the Memorial Day weekend. The Nasdaq (1.1%) reached a record high as AI stocks rallied. The Russell 2000 rose 1.0%, followed by the S&P 500 (0.7%), and the Global Dow (0.2%). The Dow ticked up less than 0.1%. Yields on 10-year Treasuries dipped to 4.46%. Crude oil prices rose for the first time in a week, gaining $0.91 to settle at $77.78 per barrel. The dollar and gold prices declined.

Stock Market Indexes

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

• April saw sales of existing homes decrease 1.9% from the prior month’s estimate. Existing home sales are down 1.9% from April 2023. Total inventory sits at a 3.5-month supply, up from 3.2 months in March. The median existing home price in April was $407,600 ($392,900 in March), an increase of 5.7% from the previous year ($385,800). Single-family home sales fell 2.1% in April and 1.3% from a year earlier. The median existing single-family home price was $412,100 in April, higher than the March price of $396,600, and up 5.6% from April 2023. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.02% as of May 16. That’s down from 7.09% the previous week but up from 6.39% one year ago.
• Sales of new single-family houses in April were 4.7% below the March rate and 7.7% under the April 2023 estimate. The median price for new houses sold in April was $433,500 ($439,500 in March). The average sales price was $505,700 ($527,400 in March). The number of houses for sale in April represented a 9.1-month supply at the current sales pace.
• New orders for manufactured durable goods rose for the third straight month after increasing 0.7% in April. Since April 2023, new orders for durable goods have increased 0.5%. Excluding transportation, new orders increased 0.4%. Excluding defense, new orders were virtually unchanged. Transportation equipment, also up three consecutive months, led the increase, up 1.2%. Nondefense new orders for capital goods decreased 1.5% in April. New orders for defense capital goods increased 15.2%.
• The national average retail price for regular gasoline was $3.584 per gallon on May 20, $0.024 per gallon below the prior week’s price but $0.050 per gallon more than a year ago. Also, as of May 20, the East Coast price fell $0.016 to $3.475 per gallon; the Midwest price dipped $0.002 to $3.432 per gallon; the Gulf Coast price decreased $0.055 to $3.113 per gallon; the Rocky Mountain price increased $0.029 to $3.430 per gallon; and the West Coast price decreased $0.070 to $4.624 per gallon.
• For the week ended May 18, there were 215,000 new claims for unemployment insurance, a decrease of 8,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended May 11 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended May 11 was 1,794,000, an increase of 8,000 from the previous week’s level, which was revised down by 8,000. States and territories with the highest insured unemployment rates for the week ended May 4 were New Jersey (2.3%), California (2.2%), Rhode Island (1.7%), Massachusetts (1.6%), Nevada (1.6%), New York (1.6%), Washington (1.6%), Alaska (1.5%), Illinois (1.5%), Minnesota (1.5%), and Puerto Rico (1.5%). The largest increases in initial claims for unemployment insurance for the week ended May 11 were in Florida (+1,331), Pennsylvania (+924), Minnesota (+542), Louisiana (+537), and Massachusetts (+363), while the largest decreases were in New York (-9,543), Illinois (-2,567), California (-1,189), Indiana (-1,079), and Michigan (-513).

Eye on the Week Ahead

There are some important economic reports released during the holiday-shortened week. The second estimate of gross domestic product for the first quarter is out this week. The initial estimate showed economic growth slowed to an annual rate of 1.6%. Also available this week is the latest report on personal income and outlays. The previous report showed consumer spending rose 0.8% in March, while consumer prices advanced 0.3%.