Investors were confronted with plenty of market-moving information last week as they waded through negative developments and some positive signs. Growing tensions in the Middle East and a slowdown in the manufacturing sector (see below) were causes for concern, while a better-than-expected jobs report (see below) helped alleviate some of those worries, at least for a time. The S&P 500, the NASDAQ, and the Dow ended a very volatile week on the plus side, while the Russell 2000 and the Global Dow closed the week lower. Among the market sectors, energy surged by more than 8.5%, while communication services, financials, and industrials also closed higher. The remaining sectors declined, led by real estate and materials. Ten-year Treasury yields surged to their highest level in nearly two months as the robust labor report cooled expectations that the Federal Reserve needed to aggressively cut interest rates.
The stock market spent most of last Monday in negative territory, facing selling pressures, only to rally at the close of the session. The S&P 500 and the NASDAQ each gained 0.4%, the Russell 2000 added 0.2%, while the Dow was flat. The Global Dow declined 0.5%. Ten-year Treasury yields rose 5.3 basis points to settle at 3.80%. Crude oil prices inched up 0.1% to $68.24 per barrel. The dollar and gold prices fell marginally.
Stocks slid lower last Tuesday amid rising tensions in the Middle East. Investors also had to consider a slowdown in manufacturing activity (see below), although job openings rose unexpectedly in August, evidencing that the lag in the labor market may not be quite so pronounced. All of the benchmark indexes listed here lost value, led by the Russell 2000 and the NASDAQ, each of which declined 1.5%. The S&P 500 fell 0.9%, the Global Dow dipped 0.5%, and the Dow slid 0.4%. Crude oil prices rose 3.6%, reaching $70.64 per barrel. Ten-year Treasury yields fell 5.9 basis points to 3.74%. The dollar rose 0.4% against a basket of currencies, while gold prices advanced 0.8%.
The benchmark indexes listed here closed mostly higher last Wednesday, with the exception of the Russell 2000 and the Global Dow, each of which slipped 0.1% lower. The S&P 500, the Dow, and the NASDAQ inched up by about 0.1%. Ten-year Treasury yields rose to 3.78%. Crude oil prices continued to advance, settling at $70.90 per barrel. The dollar gained 0.4%, while gold prices fell 0.4%.
Stocks closed lower last Thursday as escalating tensions in the Middle East and the dock workers’ strike were concerns for investors. The small caps of the Russell 2000 led the declines, falling 0.7%, followed by the Global Dow (-0.6%), the Dow (-0.4%), and the S&P 500 (-0.2%). The NASDAQ dipped less than 0.1%. Crude oil prices vaulted 5.3%, reaching $73.82 per barrel. Ten-year Treasury yields rose 6.5 basis points to 3.85%. The dollar and gold prices each rose 0.3%.
Last Friday saw stocks move higher on the heels of a strong jobs report, which quelled, at least temporarily, investors’ concerns over Middle East tensions. The Russell 2000 gained 1.5%, followed by the NASDAQ (1.2%), the S&P 500 (0.9%), and the Dow (0.8%), which reached another record high. The Global Dow rose 0.6%. Yields on 10-year Treasuries vaulted 13.1 basis points to close at 3.98% as bond prices declined. Crude oil prices gained 1.0%, the dollar advanced 0.5%, while gold prices slid 0.3%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 10/4
Weekly Change
YTD Change
DJIA
37,689.54
42,313.00
42,352.75
0.09%
12.37%
NASDAQ
15,011.35
18,119.59
18,137.85
0.10%
20.83%
S&P 500
4,769.83
5,738.17
5,751.07
0.22%
20.57%
Russell 2000
2,027.07
2,224.70
2,212.80
-0.53%
9.16%
Global Dow
4,355.28
5,064.45
5,006.95
-1.14%
14.96%
fed. funds target rate
5.25%-5.50%
4.75%-5.00%
4.75%-5.00%
0 bps
-50 bps
10-year Treasuries
3.86%
3.74%
3.98%
24 bps
12 bps
US Dollar-DXY
101.39
100.39
102.48
2.08%
1.08%
Crude Oil-CL=F
$71.30
$68.57
$74.59
8.78%
4.61%
Gold-GC=F
$2,072.50
$2,674.90
$2,671.10
-0.14%
28.88%
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 employment sector showed major signs of life in September. Total employment expanded by 254,000 last month, exceeding expectations and well above the 12-month average of 203,000. The September increase follows upward revisions to both the July and August estimates, which combined were 72,000 higher than previously reported. The unemployment rate, at 4.1%, ticked down 0.1 percentage point from August, while the number of unemployed decreased by 281,000 to 6.8 million. The labor force participation rate was unchanged at 62.7%, while the employment-population ratio rose 0.2 percentage point to 60.2%. The number of unemployed for at least 27 weeks increased by 97,000 to 1.6 million. In September, the long-term unemployed accounted for 23.7% of all unemployed people. In September, average hourly earnings increased by $0.13, or 0.4%, to $35.36. Over the past 12 months, average hourly earnings have increased by 4.0%. The average workweek edged down by 0.1 hour to 34.2 hours in September.
According to the S&P Global survey of purchasing managers, the manufacturing sector moved deeper into contraction in September. The S&P Global US Manufacturing Purchasing Managers’ Index™ remained below the 50.0 no-change mark in September, dipping to 47.3 from 47.9 in August. The manufacturing sector regressed for three consecutive months, with September’s reading the most pronounced decline since June 2023. Central to the drop in manufacturing was a sharp fall in new orders amid a slowdown in the overall economy, and uncertainty around the upcoming presidential election.
While the manufacturing sector may be waning, the services sector is showing strength. A reduction in interest rates helped increase new orders and boost services activity in September, according to the latest S&P Global survey of purchasing managers. New business continued to rise solidly, leading to a build-up of unfinished work as companies were cautious with regards to hiring in the face of strong cost pressures. In fact, input prices rose at the joint-fastest pace in a year, with selling price inflation also accelerating. The S&P Global US Services PMI® Business Activity Index posted 55.2 in September, down from 55.7 in August but still a marked monthly increase in the services sector, which has now increased in each of the last 20 months.
The number of job openings increased in August, according to the latest data from the Job Openings and Labor Turnover Summary. At roughly 8.0 million, job openings increased by 329,000. The number of hires was essentially unchanged at 5.3 million, while total separations, at 5.0 million, declined by 317,000.
The national average retail price for regular gasoline was $3.179 per gallon on September 30, $0.006 per gallon below the prior week’s price and $0.619 per gallon less than a year ago. Also, as of September 30, the East Coast price rose $0.008 to $3.060 per gallon; the Midwest price increased $0.028 to $3.105 per gallon; the Gulf Coast price fell $0.038 to $2.695 per gallon; the Rocky Mountain price dipped $0.019 to $3.415 per gallon; and the West Coast price decreased $0.069 to $4.042 per gallon.
For the week ended September 28, there were 225,000 new claims for unemployment insurance, an increase 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 September 21 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 21 was 1,826,000, a decrease of 1,000 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 September 14 were New Jersey (2.3%), California (2.0%), Puerto Rico (1.9%), Rhode Island (1.8%), Washington (1.7%), Nevada (1.6%), Illinois (1.5%), Massachusetts (1.5%), New York (1.5%), and Pennsylvania (1.4%). The largest increases in initial claims for unemployment insurance for the week ended September 21 were in Virginia (+688), Washington (+596), Ohio (+584), Louisiana (+382), and North Carolina (+236), while the largest decreases were in New York (-1,510), Texas (-1,450), South Carolina (-641), Wisconsin (-532), and Massachusetts (-531).
Eye on the Week Ahead
The latest inflation data is available this week, with the release of the Consumer Price Index for September. The CPI inched up 0.2% in August and 2.5% since August 2023. Most forecasters predict September’s data should be in line with the data from August.
The Markets (third quarter through September 30, 2024)
Wall Street got off to a good start to begin the third quarter of 2024 and continued to rally for much of the quarter. Investors spent the quarter watching inflation and economic data, trying to gauge whether the Federal Reserve might lower interest rates. Each month of the quarter provided solid evidence that inflationary pressures had been curbed. Both the personal consumption expenditures (PCE) price index and the Consumer Price Index (CPI) declined over the last three months, with the 12-month rate for the CPI ending the quarter at 2.5%, and the PCE price index closing the quarter at 2.2%. In response, the Federal Reserve cut the federal funds target rate range by 50.0 basis points, marking the first rate reduction since March 2020 in the midst of the COVDI-19 pandemic. Several indexes reached new records throughout the quarter. The S&P 500 is off to its best nine-month start since 1997, while the Dow and the NASDAQ also hit new highs in the third quarter. Among the market sectors, only energy failed to close the quarter higher. The remaining 10 sectors recorded notable gains, led by utilities (19.1%), real estate (17.1%), industrials (12.6%), and materials (11.1%). Rising bond prices weighed on yields, with the yield on 10-year Treasuries closing lower in each month of the quarter. The yield on the 2-year note ended the quarter at 3.65%, a decrease of 84.0 basis points from the beginning of the quarter. Corporate earnings enjoyed a solid quarter, with 80.0% of S&P 500 companies reporting actual earnings per share (EPS) above the five-year average of 77.0%. The S&P 500 further reported growth in earnings of 11.3%, marking the highest year-over-year growth since the fourth quarter of 2021.
Gold rose nearly 14.0% in the third quarter and nearly 28.0% in 2024 as anticipated interest rate cuts by central banks supported trading precious metals. In addition, higher demand for gold by several Asian central banks, particularly the People’s Bank of China, helped lift the price of gold, which reached a record high of $2,685.15 per ounce at the end of September. Crude oil prices fell about 16.0% in the third quarter as China’s economic struggles, rising supplies, weak demand, and escalating tensions in the Middle East took their toll. The retail price for regular gasoline was $3.185 per gallon on September 23, $0.128 below the price a month earlier and $0.253 less than the price at the end of the second quarter. Regular retail gas prices decreased $0.652 from a year ago. The U.S. dollar ended the quarter down nearly 5.0%. Home mortgage rates averaged 6.2% as of September 12, about 0.57% percent lower than the July 18 rate and down from 7.18% a year ago.
July proved to be an interesting month in the stock market as tech stocks, which had been the bellwether of the market for much of the year, dipped lower, replaced by small- and mid-cap stocks. While the Federal Reserve did not change the Fed funds rate in July, there was plenty of rhetoric supporting a rate cut as early as September. Economic data and Inflation indicators offered further support to a reduction in interest rates. The CPI registered 3.0% for the 12 months ended in June, a 0.3 percentage point decrease from the May yearly estimate. The PCE price index increased by 2.5% for the year ended in June, down from the May figure of 2.6%. Job gains slowed to 145,000 in June (revised), below the 12-month average of 215,000. Investors seemed to make moves based on the anticipated rate cuts. Lower interest rates tend to support smaller stocks, which are generally leveraged by borrowed funds. As such, the small caps of the Russell 2000 led the benchmark indexes listed here, gaining 10.1%, which accounted for most of its year-to-date 11.2% gain. The Dow rose 4.4% and the S&P 500 inched up 1.1%. The NASDAQ dipped 0.8%. Interest-sensitive market sectors also benefited from the projected rate cuts, with real estate, utilities, and financials leading the way, while information technology and communication services closed the month lower. Anticipated rate cuts also had an impact on bonds. The inverted yield curve between the 2-year and 10-year spread flattened, with yields on 10-year Treasuries falling 24.0 basis points. The retail price for regular gasoline at the end of July was $3.484 per gallon, down $0.273 from July 2023.
In August, Wall Street got off to a sluggish start only to rebound by the end of the month. Each of the benchmark indexes listed here posted gains (with the exception of the Russell 2000). The Global Dow gained 2.6%, followed by the S&P 500, which rose 2.3%. The Dow advanced 1.8% and the NASDAQ ticked up 0.7%. The Russell 2000, which could not maintain its strong July performance, fell 1.6%. While tech shares rebounded somewhat, the market broadened in general. Real estate and consumer staples led the market sectors, while consumer discretionary and energy declined. The Federal Reserve did not meet in August. However, Fed Chair Jerome Powell clearly intimated that there was strong consideration to lowering interest rates in September. With inflation indicators continuing to show a disinflationary trend, the focus shifted to employment, where job gains in July slipped to 89,000 (revised), while the unemployment rate settled at 4.2%. Bond prices rose again, dragging yields down 20.0 basis points to 3.90%. However, despite favorable stock market returns and a stabilized inflation rate, concerns over the shrinking labor market, a slowdown in industrial production, and the switch of presidential candidates, prompted some skepticism among investors.
September, which is historically a poor month for stocks, bucked that trend, with each of the benchmark indexes listed here closing the month higher. The Fed’s 50.0 basis-point interest rate cut, coupled with signs of resilience in the economy, helped raise investor confidence in the stock market. Each of the indexes listed here closed September higher, despite a slow start to the month. Consumer discretionary and utilities led the market sectors, which generally performed well in September, with the exception of health care, real estate, and energy, which lagged. Ten-year Treasury yields dipped lower. As aforementioned, the Fed cut interest rates by 50.0 basis points following the conclusion of its meeting on September 18. As a result, stocks moved generally higher, although several of the Fed officials tempered their comments concerning whether or when additional rate cuts may occur. Crude oil prices ended the month lower as weaker demand, coupled with rising surpluses, eclipsed concerns over escalating tensions in the Middle East. Gold prices advanced in September, enjoying several record highs along the way.
Stock Market Indexes
Market/Index
2023 Close
As of September 30
Monthly Change
Quarterly Change
YTD Change
DJIA
37,689.54
42,330.15
1.85%
8.21%
12.31%
NASDAQ
15,011.35
18,189.17
2.68%
2.57%
21.17%
S&P 500
4,769.83
5,762.48
2.02%
5.53%
20.81%
Russell 2000
2,027.07
2,229.97
0.56%
8.90%
10.01%
Global Dow
4,355.28
5,029.62
1.93%
7.54%
15.48%
fed. funds target rate
5.25%-5.50%
4.75%-5.00%
-50 bps
-50 bps
-50 bps
10-year Treasuries
3.86%
3.80%
-10 bps
-30 bps
-6 bps
US Dollar-DXY
101.39
100.75
-0.91%
-4.85%
-0.63%
Crude Oil-CL=F
$71.30
$68.35
-7.15%
-16.15%
-4.14%
Gold-GC=F
$2,072.50
$2,654.60
4.71%
13.69%
28.09%
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: Total employment increased by 142,000 in August, below the consensus of 160,000 and lower than the 12-month average gain of 202,000. The August estimate followed downward revisions in both June and July, which, combined, were 86,000 lower than previously reported. In August, job gains occurred in construction and health care. The unemployment rate for August ticked down 0.1 percentage point to 4.2% but was 0.4 percentage point above the rate from a year earlier (3.8%). The number of unemployed persons dipped by 48,000 to 7.1 million (6.3 million in August 2023). In August, the number of long-term unemployed (those jobless for 27 weeks or more) was unchanged at 1.5 million and accounted for 21.3% of all unemployed people. Both the labor force participation rate, at 62.7%, and the employment-population ratio, at 60.0%, did not change from the previous month. In August, average hourly earnings increased by $0.14, or 0.4%, to $35.21. Since August 2023, average hourly earnings rose by 3.8%. The average workweek edged up 0.1 hour to 34.3 hours.
There were 218,000 initial claims for unemployment insurance for the week ended September 21, 2024. During the same period, the total number of workers receiving unemployment insurance was 1,834,000. A year ago, there were 213,000 initial claims, while the total number of workers receiving unemployment insurance was 1,795,000.
FOMC/interest rates: The Federal Open Market Committee cut the federal funds target rate range by 50.0 basis points to 4.75%-5.00% following its September meeting. This was the first rate reduction in four years. The statement released by the Committee noted that it had achieved the greater confidence it sought on the path of disinflation, as the risks to the dual mandate of maximum employment and price stability were “roughly in balance.”
GDP/budget: According to the third and final estimate from the Bureau of Economic Analysis, the economy, as measured by gross domestic product, accelerated at an annualized rate of 3.0% in the third quarter of 2024. GDP increased 1.6% in the first quarter. Personal consumption expenditures rose 2.8% in the second quarter compared to a 1.5% increase in the previous quarter. Consumer spending on goods increased 3.0%, while spending on services rose 2.7%. Personal consumption expenditures (1.90%) contributed the most to overall economic growth. Gross domestic investment advanced 8.3% in the second quarter, well above the 3.6% increase in the first quarter. Nonresidential (business) fixed investment advanced 3.9% in the second quarter (4.4% in the first quarter), while residential fixed investment declined 2.8%, compared to a 13.7% increase in the first quarter. Exports climbed 1.0%, while imports, which are a negative in the calculation of GDP, increased 7.6%. Consumer prices, as measured by the personal consumption expenditures price index, increased 2.5%, compared with an increase of 3.4% in the first quarter. Excluding food and energy prices, the PCE price index increased 2.8%, compared with an increase of 3.7% in the prior quarter.
The federal budget deficit in August was $380.0 billion following July’s deficit of $244.0 billion. In August, government receipts totaled $307.0 billion, while government outlays were $687.0 billion. Through 11 months of fiscal year 2024, the total deficit sits at $1,900.0 trillion, which is roughly $400.0 billion more than the deficit through the first 11 months of the previous fiscal year.
Inflation/consumer spending: The PCE price index ticked up 0.1% in August after increasing 0.2% in July. Prices for goods decreased 0.2%, while prices for services increased 0.2%. Food prices increased 0.1%, while energy prices decreased 0.8%. Excluding food and energy, the PCE price index increased 0.1%. The 12-month PCE price index for August increased 2.2%. Prices for goods decreased 0.9%, while prices for services increased 3.7%. Food prices increased 1.1%, while energy prices decreased 5.0%. Excluding food and energy, the PCE price index increased 2.7% from one year ago. Also in August, both personal income and disposable (after-tax) personal income rose 0.2%. Personal consumption expenditures, a measure of consumer spending, increased 0.2%.
The Consumer Price Index rose 0.2% in August, the same increase as in July. Over the 12 months ended in August, the CPI rose 2.5%, down 0.4 percentage point from the 12-month period ended in July. This was the smallest 12-month increase since February 2021. Excluding food and energy, the CPI rose 0.3% in August, (0.2% in July), and 3.2% from August 2023. Shelter prices rose 0.5% in August and were the main factor in the overall increase. Since August 2023, shelter prices have risen 5.2%. Excluding shelter prices, the CPI was unchanged in August and up 1.1% from a year earlier. Energy prices fell 0.8% from July and 4.0% from August 2023. Prices for food rose 0.1% in August (2.1% for the year).
The Producer Price Index rose 0.2% in August after being unchanged in July. The increase was attributable to a 0.4% increase in prices for services. Prices for goods did not change. For the 12 months ended in August, producer prices advanced 1.7%, 0.5 percentage point below the rate for the 12-months ended in July.
Housing: Sales of existing homes declined 2.5% in August and 4.2% over the last 12 months. According to the National Association of Realtors® (NAR), the market for existing homes remained sluggish but lower mortgage rates and increased inventory should help spur sales moving forward. Unsold inventory of existing homes in August represented a 4.2-month supply at the current sales pace, up slightly from the July estimate. The median existing-home price was $416,700 in August, down from the July estimate of $421,400, but 3.1% above the August 2023 price of $404,200. Sales of existing single-family homes decreased 2.8% in August and were 3.3% under the August 2023 rate. The median existing single-family home price was $422,100 in August, down from $427,200 in July but well above the August 2023 estimate of $410,200.
New single-family home sales decreased in August, falling 4.7% below the July estimate but 9.8% higher than the August 2023 rate. The median sales price of new single-family houses sold in July was $420,600 ($429,000 in July). The August average sales price was $492,700 ($508,200 in July). The inventory of new single-family homes for sale in August represented a supply of 7.8 months at the current sales pace, up from 7.3 months in July.
Manufacturing: Industrial production increased 0.8% in August following a 0.9% in July. Manufacturing output rose 0.9% in August, rebounding from a 0.7% decline in July. The August increase was due, in part, to a recovery in motor vehicles and parts, which jumped nearly 10.0% after falling 9.0% in July. Manufacturing excluding motor vehicles and parts rose 0.3%. Mining output climbed 0.8%, while the index for utilities was unchanged. For the 12 months ended in August, total industrial production was unchanged from its year-earlier level. Over the same period, manufacturing increased 0.2%, mining increased 0.1%, while utilities fell 0.9%.
New orders for durable goods were unchanged in August from July. Excluding transportation, new orders increased 0.5%. Excluding defense, new orders decreased 0.2%. Electrical equipment, appliances, and components, up two of the last three months, drove the increase after advancing 1.9%. New orders for nondefense capital goods decreased 1.3% in August, while new orders for defense capital goods increased 5.3%.
Imports and exports: U.S. import prices ticked down 0.3% in August following increases of 0.1% in both July and June. The August decline in imports was the largest monthly drop since the index decreased 0.7% in December 2023. In spite of the August decline, U.S. import prices increased 0.8% over the past year. Import fuel prices decreased 3.0% in August after increasing 1.1% the previous month. The August drop was the largest one-month decline since the index fell 8.0% in December 2023. Prices for nonfuel imports edged down 0.1% in August. Prices for U.S. exports fell 0.7% in August, after advancing 0.5% the previous month. Lower prices for nonagricultural and agricultural exports each contributed to the decrease in U.S. export prices in August. U.S. export prices fell 0.7% for the year ended in August, the first 12-month drop since April 2024.
The international trade in goods deficit was $94.3 billion in August, down $8.6 billion, or 8.3%, from July. Exports of goods were $177.0 billion in August, 2.4% over July exports. Imports of goods were $253.8 billion in August, 1.6% below the July estimate. Since August 2023, exports increased 4.1%, while imports increased 6.9%.
The latest information on international trade in goods and services, released September 4, is for July and revealed that the goods and services trade deficit was $78.8 billion, up $5.8 billion, or 7.9%, from the June deficit. July exports were $266.6 billion, 0.5% more than June exports. July imports were $345.4 billion, 2.1% above June’s estimate. Year to date, the goods and services deficit increased $36.2 billion, or 7.7%, from the same period in 2023. Exports increased $65.9 billion, or 3.7%. Imports increased $102.1 billion, or 4.5%.
International markets: China’s stock market, which had been tumbling for several months, shot higher at the end of September on the heels of the most aggressive stimulus measures since the pandemic, which included interest rate cuts and fiscal support, in an attempt to rejuvenate China’s sagging economy. Elsewhere, the annual inflation rate in Germany fell to 1.6% in September, the lowest rate since February 2021. Producer prices in Greece fell by 2.4% since August 2023, marking the sharpest deflation since February. Japan’s industrial production fell more than expected in August as motor vehicle output slid 10.6%. For September, the STOXX Europe 600 Index dipped 0.4%; the United Kingdom’s FTSE fell 1.1%; Japan’s Nikkei 225 Index slipped 2.0%; while China’s Shanghai Composite Index jumped 18.7%.
Consumer confidence: Consumer confidence fell in September to 98.7, from an upwardly revised 105.6 in August, according to the Conference Board Consumer Confidence Index®. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell to 124.3 in September, down 10.3 points from the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, declined to 81.7 in September, down from 86.3 in August.
Eye on the Quarter Ahead
The Federal Reserve does not meet in October, so there will be some time to determine the impact of the September 50.0-basis-point rate cut. Of course, all eyes will focus on the results of the presidential and congressional elections in November.
The Markets (as of market close September 27, 2024)
Wall Street enjoyed a solid week of gains following a rough start to the month. Each of the benchmark indexes listed here advanced, with the exception of the Russell 2000, which is generally the most volatile of the aforementioned indexes. Eight of the 11 S&P 500 market sectors closed the week ahead, led by materials and utilities. Only health care, financials, and energy declined. The personal consumption expenditures (PCE) price index, the preferred inflation indicator of the Federal Reserve, inched up 0.1% in August and 2.2% over the last 12 months, nearing the Fed’s 2.0% target. Signs of cooling inflationary pressures likely fueled expectations that the Fed may cut interest rates again this year. Gold prices hit a record high earlier in the week, only to pull back later. Crude oil prices fell below $70.00 per barrel.
Stocks began the last week of September with mixed results. The Global Dow (0.4%) led the benchmark indexes listed here. The S&P 500 (0.3%) and the Dow (0.2%) ticked up higher, but enough to achieve fresh record highs. The NASDAQ ticked up 0.1%. The Russell 2000 (-0.3%) lagged. Ten-year Treasury yields inched up 1.1 basis points to 3.73%. Crude oil prices fell 0.7%, settling at about $70.52 per barrel. The dollar and gold prices posted marginal gains.
The S&P 500 and the Dow hit new records last Tuesday after climbing 0.3% and 0.2%, respectively. The Global Dow (0.8%) gained the most of the remaining benchmark indexes listed here, followed by the NASDAQ (0.6%) and the Russell 2000 (0.2%). Crude oil prices jumped 1.6% to settle at $71.51 per barrel, pushed higher by China’s major economic stimulus measures and escalating tensions in the Middle East. Yields on 10-year Treasuries were unchanged, closing at 3.73%. The dollar fell 0.5%, while gold prices rose 1.4%.
Last Wednesday saw an early-day rally lose steam by the close of trading. Among the benchmark indexes listed here, only the NASDAQ was able to avoid ending the session in the red by less than 0.1%. The remaining indexes declined, with the Russell 2000 falling 1.2%, followed by the Dow (-0.7%), the Global Dow (-0.4%), and the S&P 500 (-0.2%). Bond prices also dipped, sending yields higher, with 10-year Treasuries settling at 3.78%. Crude oil prices slipped just below $70.00 per barrel after declining 2.6%. The dollar (0.5%) and gold prices (0.3%) advanced.
Strong corporate earnings and favorable economic data helped lift stocks higher last Thursday. The Global Dow led the indexes after gaining 1.1%. The NASDAQ, the Dow, and the Russell 2000 each climbed 0.6%. The S&P 500 rose 0.4%, enough to notch another record high. Ten-year Treasury yields ticked up to 3.79%. Crude oil prices decreased for the second straight day, falling 3.2% to $67.47 per barrel. The dollar fell 0.3%, while gold prices advanced 0.4%.
Stocks finished mixed on Friday as investors contemplated how the Federal Reserve would view the latest inflation data. The Russell 2000 gained 0.7%, the Global Dow rose 0.5%, while the Dow reached another record high after increasing 0.3%. The NASDAQ fell 0.4% and the S&P 500 dipped 0.1%. Crude oil prices rebounded after advancing 1.3%. Yields on 10-year Treasuries dipped to 3.74%. The dollar and gold prices declined.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 9/27
Weekly Change
YTD Change
DJIA
37,689.54
42,063.36
42,313.00
0.59%
12.27%
NASDAQ
15,011.35
17,948.32
18,119.59
0.95%
20.71%
S&P 500
4,769.83
5,702.55
5,738.17
0.62%
20.30%
Russell 2000
2,027.07
2,227.89
2,224.70
-0.14%
9.75%
Global Dow
4,355.28
4,946.28
5,064.45
2.39%
16.28%
fed. funds target rate
5.25%-5.50%
4.75%-5.00%
4.75%-5.00%
0 bps
-50 bps
10-year Treasuries
3.86%
3.72%
3.74%
2 bps
-12 bps
US Dollar-DXY
101.39
100.79
100.39
-0.40%
-0.99%
Crude Oil-CL=F
$71.30
$71.77
$68.57
-4.46%
-3.83%
Gold-GC=F
$2,072.50
$2,644.90
$2,674.90
1.13%
29.07%
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 (GDP) rose 3.0% in the second quarter, according to the third and final estimate from the Bureau of Economic Analysis. Personal consumption expenditures, the largest contributor to over all GDP, rose 1.90%. Current dollar GDP increased 5.6% in the second quarter. The personal consumption expenditures (PCE) price index increased 2.5% (3.4% in the first quarter). Excluding food and energy prices, the PCE price index increased 2.8% (3.7% in the first quarter).
Personal income increased $50.5 billion, or 0.2%, in August, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income, personal income less personal current taxes, increased $34.2 billion, or 0.2%, and personal consumption expenditures (PCE) increased $47.2 billion, or 0.2%. The PCE price index increased 0.1%. Excluding food and energy, the PCE price index also increased 0.1%. Since August 2023, the PCE price index has risen 2.2%, while the PCE price index less food and energy rose 2.7%.
Sales of new single-family houses in August 2024 were 4.7% below the July rate but 9.8% above the August 2023 estimate. The median sales price of new houses sold in August 2024 was $420,600. The average sales price was $492,700. Inventory of new single-family houses for sale represented a supply of 7.8 months at the current sales rate.
New orders for manufactured durable goods in August, up six of the last seven months, were unchanged from July, which estimated a 9.9% increase in durable goods orders. Excluding transportation, new orders increased 0.5%. Excluding defense, new orders decreased 0.2%.
The international trade in goods deficit was $94.3 billion in August, down $8.6 billion from July. Exports of goods for August were $177.0 billion, $4.1 billion more than July exports. Imports of goods for August were $271.3 billion, $4.5 billion less than July imports.
The national average retail price for regular gasoline was $3.185 per gallon on September 23, $0.005 per gallon above the prior week’s price but $0.652 per gallon less than a year ago. Also, as of September 23, the East Coast price fell $0.033 to $3.052 per gallon; the Midwest price increased $0.072 to $3.077 per gallon; the Gulf Coast price rose $0.005 to $2.733 per gallon; the Rocky Mountain price climbed $0.034 to $3.434 per gallon; and the West Coast price decreased $0.025 to $4.111 per gallon.
For the week ended September 21, there were 218,000 new claims for unemployment insurance, a decrease of 4,000 from the previous week’s level, which was revised up by 3,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 14 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 14 was 1,834,000, an increase of 13,000 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 September 7 were New Jersey (2.4%), California (2.0%), Puerto Rico (2.0%), Rhode Island (2.0%), Nevada (1.7%), Washington (1.7%), Massachusetts (1.6%), New York (1.6%), Illinois (1.5%), and Pennsylvania (1.4%). The largest increases in initial claims for unemployment insurance for the week ended September 14 were in Texas (+2,216), New York (+1,842), California (+1,108), Georgia (+1,014), and Michigan (+787), while the largest decreases were in Massachusetts (-1,969), Wisconsin (-794), Connecticut (-569), Nebraska (-517), and Louisiana (-224).
Eye on the Week Ahead
October kicks off with the release of the September employment figures. Job gains have slowed notably over the past few months, which contributed to the cut in interest rates by the Federal Reserve. It appears that the Fed is nearing its goals of maximum employment and 2.0% inflation.
The Markets (as of market close September 20, 2024)
The interest rate decrease by the Federal Reserve helped drive stocks higher last week. Each of the benchmark indexes listed here closed higher, led by the Russell 2000. Communication services, energy, and utilities were the best performing market sectors, while consumer staples, health care, and real estate lagged. Gold prices surged past $2,600.00 per ounce, hitting a new, record high on Friday. Crude oil prices advanced for the second straight week, while the dollar retreated following the drop in interest rates.
Stocks opened the week with mixed results as investors exercised some caution ahead of the Federal Reserve meeting later in the week. Nevertheless, the Dow rose 0.6%, hitting a new record high, while the Global Dow (0.5%), the Russell 2000 (0.3%), and the S&P 500 (0.1%) also advanced. The tech-heavy NASDAQ saw its rally stop after sliding 0.5%. Bond prices continued to advance with yields moving lower. Ten-year Treasury yields fell 2.9 basis points to 3.62%. Crude oil prices cracked the $70.00 per barrel threshold, closing at $70.45 per barrel. The dollar and gold prices declined.
Wall Street reflected caution last Tuesday as investors remained uncertain about the size of the anticipated interest rate cut. The small caps of the Russell 2000 led the benchmark indexes after climbing 0.7%. The NASDAQ inched up 0.2% and the S&P 500 ticked up less than 0.1%. The Global Dow and the Dow ended the session flat. Ten-year Treasury yields settled at 3.64%. Crude oil prices climbed 1.9% to $71.39 per barrel. The dollar gained 0.2%, while gold prices declined 0.5%.
Despite the Fed lowering interest rates by 50.0 basis points (see below), stocks ended last Wednesday ticking lower. The rate cut is the first in four years, and further adjustments to the Fed’s monetary policy may now focus on the employment sector, which has slowed. The Fed meets two more times this year, and the likelihood of another rate cut of this size is minimal. Among the indexes listed here, only the Russell 2000 closed marginally in the black. The remaining indexes declined, with the Dow, the S&P 500, the NASDAQ, and the Global Dow each falling about 0.3%. Following news of the rate decrease, the dollar inched higher (0.2%), while gold prices fell 0.7%. Ten-year Treasury yields gained 4.3 basis points to close at 3.68%. The rally ended for crude oil prices, which fell 1.7% to $69.99 per barrel.
The interest rate cut from a day earlier boosted stocks last Thursday. Each of the benchmark indexes enjoyed notable gains, with the Dow and S&P 500 recording new record highs. A jump in tech stocks helped propel the NASDAQ 2.5%. The Russell 2000 rose 2.1%, the S&P 500 advanced 1.7%, and both the Dow and the Global Dow increased 1.3%. Ten-year Treasury yields settled at 3.74%, an increase of 5.5 basis points. Crude oil prices advanced 1.6% to $72.07 per barrel. The dollar ticked higher, while gold prices rose 0.5%.
Friday saw stocks close mostly lower, with only the Dow advancing 0.1%. Otherwise, the post-Fed rally waned as the remaining benchmark indexes listed here ended the session in the red. The Russell 2000 fell 1.1%, the NASDAQ dropped 0.4%, while the S&P 500 and the Global Dow each declined 0.2%. The yield on 10-year Treasuries slipped to 3.72%. Crude oil prices dipped 0.3% to $71.77 per barrel. The dollar inched up 0.1%, while gold prices advanced 1.2%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 9/20
Weekly Change
YTD Change
DJIA
37,689.54
41,393.78
42,063.36
1.62%
11.60%
NASDAQ
15,011.35
17,683.98
17,948.32
1.49%
19.56%
S&P 500
4,769.83
5,626.02
5,702.55
1.36%
19.55%
Russell 2000
2,027.07
2,182.49
2,227.89
2.08%
9.91%
Global Dow
4,355.28
4,882.10
4,946.28
1.31%
13.57%
fed. funds target rate
5.25%-5.50%
5.25%-5.50%
4.75%-5.00%
-50 bps
-50 bps
10-year Treasuries
3.86%
3.65%
3.72%
7 bps
-14 bps
US Dollar-DXY
101.39
101.13
100.79
-0.34%
-0.59%
Crude Oil-CL=F
$71.30
$69.26
$71.77
3.62%
0.66%
Gold-GC=F
$2,072.50
$2,608.70
$2,644.90
1.39%
27.62%
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 Federal Open Market Committee, by an 11-1 vote, moved to lower the fed funds target rate range by 50.0 basis points to 4.75%-5.00%. The lone dissenting vote was by Governor Michelle Bowman who preferred a 25.0-basis point reduction. The Committee’s statement indicated that economic activity has continued to expand at a solid pace. Job gains have slowed and, while the unemployment rate has advanced, it remained low. In further support of the rate reduction, the Committee noted that it has gained greater confidence that inflation is moving sustainably toward the 2.0% target and that the risks to achieving its employment and inflation goals are roughly in balance. Further adjustments to the target range for the federal funds rate will be based on an assessment of incoming data, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Retail sales inched up 0.1% last month and advanced 2.1% since August 2023. Retail trade sales were up 0.1% in August and up 2.0% over the last 12 months. Nonstore (online) retailer sales were up 1.4% in August and rose 7.8% from last year, while food services and drinking places, which, while unchanged last month, were up 2.7% from August 2023.
In August, industrial production rose 0.8% after falling 0.9% in July. Manufacturing output increased 0.9% in August after decreasing 0.7% during the previous month. This pattern was due in part to a recovery in the index of motor vehicles and parts, which jumped nearly 10.0% in August after dropping roughly 9.0% in July. Manufacturing excluding motor vehicles and parts moved up 0.3% in August. Mining climbed 0.8%, while the utilities index was unchanged from July. Total industrial production in August was the same as its year-earlier level. Capacity utilization moved up to 78.0% in August, a rate that is 1.7% below its long-run average.
The number of issued residential building permits rose 4.9% in August. Single-family building permits increased 2.8% last month. However, since August 2023, residential building permits have fallen 6.5%. Housing starts in August advanced 9.6% and moved up 3.9% over the last 12 months. Single-family housing starts jumped 15.8% last month. Housing completions rose 9.2% in August and 30.2% above the August 2023 rate. Single-family housing completions declined 5.6% last month.
August saw sales of existing homes fall 2.5% from July. Year over year, existing-home sales were down 4.2%. According to the report released by the National Association of Realtors®, despite the recent retraction in sales, lower mortgage rates and increasing inventory should drive sales higher in future months. Housing inventory sat a 4.2-month supply in August, up from the July estimate of 4.1 months. The median existing-home price in August was $416,700, down from July’s price of $421,400 but up from the August 2023 value of $404,200. Single family home sales decreased 2.8% last month and declined 3.3% from the previous year. The median existing-single family home price was $422,100 in August, lower than the July price of $427,200 but well above the August 2023 price of $410,200. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.20% as of September 12, down from 6.35% one week ago and 7.18% one year ago.
The national average retail price for regular gasoline was $3.180 per gallon on September 16, $0.056 per gallon under the prior week’s price and $0.698 per gallon less than a year ago. Also, as of September 16, the East Coast price fell $0.064 to $3.085 per gallon; the Midwest price decreased $0.093 to $3.005 per gallon; the Gulf Coast price dipped $0.072 to $2.728 per gallon; the Rocky Mountain price rose $0.043 to $3.400 per gallon; and the West Coast price increased $0.032 to $4.136 per gallon.
For the week ended September 14, there were 219,000 new claims for unemployment insurance, a decrease of 12,000 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 September 7 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 7 was 1,829,000, a decrease of 14,000 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 August 31 were New Jersey (2.7%), Rhode Island (2.2%), California (2.0%), Puerto Rico (1.9%), Minnesota (1.7%), New York (1.7%), Washington (1.7%), Massachusetts (1.6%), Nevada (1.6%), Connecticut (1.5%), Illinois (1.5%), and Pennsylvania (1.5%). The largest increases in initial claims for unemployment insurance for the week ended September 7 were in Nebraska (+628), Wisconsin (+504), Iowa (+403), Virginia (+303), and Minnesota (+248), while the largest decreases were in New York (-2,878), California (-1,370), Ohio (-1,086), Michigan (-1,042), and Georgia (-891).
Eye on the Week Ahead
The final estimate for second quarter GDP is out this week. The prior estimate had the economy expanding at an annualized rate of 3.0%. The report on Personal Income and Outlays for August is also available this week. July saw personal income rise 0.3%, while personal consumption expenditures advanced 0.5%. Consumer prices rose 0.2% for July and 2.5% over the last 12 months ended in July.
The Markets (as of market close September 13, 2024)
Equities rallied notably last week as investors awaited this week’s Federal Reserve meeting in anticipation of at least a 25.0-basis-point reduction in interest rates. Nine of the 11 market sectors ended last week higher, led by information technology. Only financials and energy lagged. The yield on 10-year Treasuries slipped to its lowest level since May 2023. Crude oil prices posted the first weekly advance in over a month. The dollar fell amid expectations of the aforementioned interest rate cut.
Investors took advantage of devalued stocks last Monday, sending values higher. Each of the benchmark indexes listed here gained ground, with the Dow, the NASDAQ, and the S&P 500 all climbing 1.2%. The Global Dow advanced 0.4%, while the Russell 2000 ticked up 0.3%. Ten-year Treasury yields continued the prior week’s tailspin, falling to 3.69%. Prices for crude oil gained 1.5% to close at $68.68 per barrel. The dollar and gold prices each increased 0.4%.
Equities closed mixed last Tuesday. For the second straight day, tech shares helped drive the NASDAQ (0.8%) and the S&P 500 (0.5%) higher, while bank and energy stocks dragged the Dow (-0.2%) lower. The Global Dow dipped 0.2%, while the small caps of the Russell 2000 ended the session flat. Investors were occupied with the presidential debate that evening, plus the Consumer Price Index report released on Wednesday. Bond prices continued to move higher, pulling yields down. Ten-year Treasury yields fell 5.1 basis points to 3.64%. Crude oil prices declined to $66.24 per barrel, the lowest price since 2021. For the last several months, oil prices have been impacted by weakening demand in China, coupled with OPEC’s 2024 and 2025 downwardly revised demand projections. The dollar edged up 0.1%, and gold prices rose 0.5%.
Stocks climbed higher last Wednesday following the presidential debate and a favorable CPI report. Once again, tech stocks led the charge, helping to propel each of the benchmark indexes listed here. The NASDAQ rose 2.2%, followed by the S&P 500 (1.1%), the Russell 2000 and the Dow (0.3%), and the Global Dow (0.1%). Crude oil prices rallied, climbing 2.2% to $67.19 per barrel. Yields on 10-year Treasuries ticked up to 3.65%. The dollar inched up 0.1%, while gold prices slipped 0.1%. Investors were encouraged by the CPI, which came in at an annual rate of 2.5%, the lowest since February 2021.
Wall Street enjoyed a second straight positive day of trading last Thursday. Stocks saw gains in most sectors, with technology, megacaps, and AI shares moving higher. The small caps of the Russell 2000 (1.2%) led the benchmark indexes, followed by the Global Dow (1.1%), the NASDAQ (1.0%), the S&P 500 (0.8%), and the Dow (0.6%). Ten-year Treasury yields inched up to 3.68%. Crude oil prices rose 2.8% to $69.18 per barrel. The dollar lost 0.4%, while gold prices advanced 1.8%.
Stocks closed the week higher last Friday. Each of the benchmark indexes posted solid gains, with the Russell 2000 leading the charge after climbing 2.5%. The Dow and the NASDAQ added 0.7%, the Global Dow rose 0.6%, and the S&P 500 advanced 0.5%. Yields on 10-year Treasuries fell to 3.65%. Crude oil prices ticked up 0.4% to $69.26 per barrel. The dollar dipped 0.2%, while gold prices rose 1.1%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 9/13
Weekly Change
YTD Change
DJIA
37,689.54
40,345.41
41,393.78
2.60%
9.83%
NASDAQ
15,011.35
16,690.83
17,683.98
5.95%
17.80%
S&P 500
4,769.83
5,408.42
5,626.02
4.02%
17.95%
Russell 2000
2,027.07
2,091.41
2,182.49
4.35%
7.67%
Global Dow
4,355.28
4,782.56
4,882.10
2.08%
12.10%
fed. funds target rate
5.25%-5.50%
5.25%-5.50%
5.25%-5.50%
0 bps
0 bps
10-year Treasuries
3.86%
3.71%
3.65%
-6 bps
-21 bps
US Dollar-DXY
101.39
101.18
101.13
-0.05%
-0.26%
Crude Oil-CL=F
$71.30
$68.14
$69.26
1.64%
-2.86%
Gold-GC=F
$2,072.50
$2,524.00
$2,608.70
3.36%
25.87%
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 Consumer Price Index increased 0.2% in August and 2.5% over the last 12 months. This is the smallest 12-month increase since February 2021. Excluding food and energy prices, the CPI rose 0.3% last month (0.2% in July) and 3.2% since August 2023. The index for shelter rose 0.5% in August and was the main factor in the all items increase. The food index increased 0.1% in August after rising 0.2% in July. The energy index fell 0.8% over the month after being unchanged the preceding month. Over the last 12 months, prices for food rose 2.1%, energy fell 4.0%, and shelter rose 5.2%.
Prices at the producer level increased 0.2% in August, in line with expectations. Over the last 12 months, producer prices rose 1.7%. The August increase was attributable to a rise in prices for services. Nearly 60.0% of the increase in prices for services was due to a 0.3% advance in prices for services less trade, transportation, and warehousing. Prices for goods were unchanged last month. Goods prices less foods, energy, and trade services advanced 0.3% in August, the same as in July. For the 12 months ended in August, prices less foods, energy, and trade services moved up 3.3%.
According to the monthly Treasury statement of receipts and outlays, the August deficit was $380.00 billion, well above the $244.00 billion deficit for July and higher than the August 2023 surplus of $89.00 billion. With only one more month left in the fiscal year, the total deficit sat at $1,897.00 trillion, $373.00 billion above the deficit over the same period last fiscal year.
U.S. import prices declined 0.3% in August after increasing 0.1% in both June and July. The August monthly decline was the largest drop since December 2023, when prices fell 0.7%. Most of the August decrease in import prices is attributable to import fuel prices, which decreased 3.0% in August after increasing 1.1% the previous month. The August drop in fuel prices was the largest one-month decline since prices fell 8.0% in December 2023. Despite the August decline, import prices rose 0.8% over the past 12 months. Prices for U.S. exports fell 0.7% in August after advancing 0.5% the previous month. Lower prices for nonagricultural and agricultural exports each contributed to the decrease in export prices in August. Over the last 12 months, export prices declined 0.7%, the first year-over-year price drop since April 2024.
The national average retail price for regular gasoline was $3.236 per gallon on September 9, $0.053 per gallon under the prior week’s price and $0.586 per gallon less than a year ago. Also, as of September 9, the East Coast price fell $0.084 to $3.149 per gallon; the Midwest price decreased $0.073 to $3.098 per gallon; the Gulf Coast price dipped $0.044 to $2.800 per gallon; the Rocky Mountain price declined $0.044 to $3.357 per gallon; and the West Coast price rose $0.003 to $4.104 per gallon.
For the week ended September 7, there were 230,000 new claims for unemployment insurance, an increase of 2,000 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 August 31 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended August 31 was 1,850,000, an increase of 5,000 from the previous week’s level, which was revised up by 7,000. States and territories with the highest insured unemployment rates for the week ended August 24 were New Jersey (2.8%), Rhode Island (2.6%), California (2.1%), Puerto Rico (2.0%), Connecticut (1.9%), Minnesota (1.9%), Massachusetts (1.8%), New York (1.8%), Nevada (1.7%), Pennsylvania (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended August 31 were in Massachusetts (+2,230), Wisconsin (+820), Ohio (+806), Pennsylvania (+724), and Washington (+399), while the largest decreases were in Texas (-1,396), New York (-1,185), North Dakota (-919), California (-833), and Indiana (-796).
Eye on the Week Ahead
The focus will be squarely on the Federal Open Market Committee, which meets this week for the first time since July. Many observers predict that the Fed will cut rates by 50.0 basis points in light of inflation moving closer to the 2.0% Fed target and the slowdown in employment.
Market volatility continued last week as stocks tumbled Monday and Wednesday, only to rebound at the end of last week, but not enough to avoid closing in the red for the second week in a row. Each of the benchmark indexes listed here lost value, with the small caps of the Russell 2000 falling the furthest. Despite the recent downturn, the indexes remain ahead year to date. Among the market sectors, only industrials and communication services closed higher, while materials and utilities shed the most value. Crude oil prices ended a losing streak, gaining nearly 4.0% last week. The dollar was flat, while gold prices slipped lower. Bond prices fluctuated throughout the week, ultimately settling lower, which drove yields higher.
The stock sell-off continued last Monday on increasing worries over a U.S. economic slowdown. Markets worldwide took a hit as investors feared that weak economic data and mediocre corporate earnings could be signs of a recession. The S&P 500 (-3.0%) and the Dow (-2.6%) had their worst day in over two years. The Nasdaq (-3.4%) endured its worst start to a month since 2008. The Global Dow (-3.4%) and the Russell 2000 (-3.3%) also slid lower. Ten-year Treasury yields headed to their lowest levels in a year after settling at 3.78%. Crude oil prices closed at $72.94 per barrel. The dollar slid 0.4%, while gold prices fell 0.8%.
The markets moved higher last Tuesday as investors took advantage of equities that had fallen in value. The Russell 2000 led the benchmark indexes, gaining 1.2%, followed by the Global Dow (1.1%), the Nasdaq (1.0%), and the Dow (0.8%). Bond prices fell, driving yields higher, with 10-year Treasuries gaining 10.3 basis points to close at 3.88%. Crude oil prices settled at $73.09 per barrel. The dollar edged higher, while gold prices fell 0.6%.
Tuesday’s market rebound proved to be short-lived as stocks trended lower by the close of trading last Wednesday. The Russell 2000 lost about 1.4% and the Nasdaq fell 1.1%. The S&P 500 declined 0.8% and the Dow dipped 0.6%. The Global Dow rose 0.5%. Ten-year Treasury yields marched toward 4.00%, ending the session just short at 3.96%. Crude oil prices advanced nearly 3.0% to $75.37 per barrel. The dollar gained 0.2%, while gold prices fell 0.2%.
In what turned into a roller coaster of a week, stocks jumped higher last Thursday, led by a 2.9% increase by the Nasdaq. The Russell 2000 advanced 2.4%, the S&P 500 gained 2.3%, the Dow rose 1.8%, and the Global Dow increased 1.0%. Weekly jobless claims unexpectedly fell 17,000 (see below), which brightened the mood of investors. Yields on 10-year Treasuries settled at 3.99% after gaining 0.3 basis points. Crude oil prices rose 1.1% to $76.04 per barrel. The dollar was unchanged. Gold prices gained 1.3%.
Large caps and tech shares rose higher, while small caps lagged to close out last week. There was no economic data released last Friday, so investors could focus on inflation data set to be released this week. The Global Dow led the indexes, gaining 0.6%, followed by the Nasdaq and the S&P 500, which both advanced 0.5%. The Dow inched up 0.1%, while the Russell 2000 fell 0.2%. The market sectors mostly advanced, with only industrials and materials falling lower. Ten-year Treasury yields fell to 3.94% as bond prices climbed higher. Crude oil prices advanced 1.0% to $76.97 per barrel. Gold prices edged up 0.3%, while the dollar inched lower.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 8/9
Weekly Change
YTD Change
DJIA
37,689.54
39,737.26
39,497.54
-0.60%
4.80%
Nasdaq
15,011.35
16,776.16
16,745.30
-0.18%
11.55%
S&P 500
4,769.83
5,346.56
5,344.16
-0.04%
12.04%
Russell 2000
2,027.07
2,109.31
2,080.92
-1.35%
2.66%
Global Dow
4,355.28
4,639.08
4,629.29
-0.21%
6.29%
fed. funds target rate
5.25%-5.50%
5.25%-5.50%
5.25%-5.50%
0 bps
0 bps
10-year Treasuries
3.86%
3.79%
3.94%
15 bps
8 bps
US Dollar-DXY
101.39
103.22
103.15
-0.07%
1.74%
Crude Oil-CL=F
$71.30
$74.11
$76.97
3.86%
7.95%
Gold-GC=F
$2,072.50
$2,480.00
$2,469.50
-0.42%
19.16%
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
While the manufacturing sector may have slowed in July, the services sector saw an expansion of business activity last month. A rise in new orders has encouraged companies to take on extra staff. Input cost inflation accelerated, but the increased costs were passed on to consumers. The S&P Global US Services PMI® business Activity Index posted a reading of 55.0, signaling monthly expansion in services activity, which has continued for 18 months.
The goods and services trade deficit was $73.1 billion in June (the most recent data available), down $1.9 billion, or 2.5%, from the previous month. Exports, at $265.9 billion, increased by 1.5%, while imports, at $339.0 billion, advanced 0.6%. The June decrease in the goods and services deficit reflected a decrease in the goods deficit of $2.5 billion to $97.4 billion and a decrease in the services surplus of $0.6 billion to $24.2 billion. Year to date, the goods and services deficit increased $22.7 billion, or 5.6%, from the same period in 2023. Exports increased $58.0 billion, or 3.8%. Imports increased $80.7 billion, or 4.2%.
The national average retail price for regular gasoline was $3.448 per gallon on August 5, $0.036 per gallon under the prior week’s price and $0.380 per gallon less than a year ago. Also, as of August 5, the East Coast price fell $0.020 to $3.375 per gallon; the Midwest price decreased $0.048 to $3.428 per gallon; the Gulf Coast price dipped $0.084 to $3.010 per gallon; the Rocky Mountain price advanced $0.040 to $3.435 per gallon; and the West Coast price decreased $0.026 to $4.080 per gallon.
For the week ended August 3, there were 233,000 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 July 27 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended July 27 was 1,875,000, an increase of 6,000 from the previous week’s level, which was revised down by 8,000. 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 July 20 were New Jersey (2.8%), Rhode Island (2.6%), Puerto Rico (2.4%), California (2.3%), Minnesota (2.0%), Pennsylvania (1.9%), Connecticut (1.8%), Illinois (1.7%), Massachusetts (1.7%), New York (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended July 27 were in Michigan (+4,027), Missouri (+3,410), Massachusetts (+2,127), Virginia (+637), and Minnesota (+487), while the largest decreases were in Texas (-6,607), New York (-2,396), Ohio (-2,377), Florida (-1,587), and Tennessee (-1,488).
Eye on the Week Ahead
Inflation data for July is released this week. The Consumer Price Index dipped 0.1% in June, and investors will be looking for similar results in July. Prices producers paid, on the other hand, rose 0.2% in June.
Stocks closed mostly higher in July. Tech shares, including AI stocks, which had been a bellwether for much of the year, retreated in July, dragging the Nasdaq to its worst July performance since 2014. The remaining indexes fared better, with the Russell 2000 enjoying its best month since December 2023 and its best July since 2022. The Dow also had its best month of the year. Most of the market sectors advanced in July, with the notable exceptions of communication services (-4.5%) and information technology (-2.4%). Real estate (7.5%), financials (6.0%), and utilities (5.9%) outpaced the remaining sectors.
Inflationary data showed price pressures stabilized in June. The 12-month interest rates of the Consumer Price Index and the Personal Consumption Expenditures (PCE) Price Index declined. Prices for commodities that are prevalent for most households, such as food at home, gasoline, new and used motor vehicles, and apparel, changed very little over the year. The PCE price index, the preferred barometer of the Federal Reserve, slowed to 2.5% for the year ended in June (see below) as it inches closer to the Fed’s 2.0% target inflation rate.
Growth of the U.S. economy continued at a modest pace, despite the Fed’s restrictive monetary policy. The gross domestic product (GDP) exceeded expectations after increasing 2.8% in the second quarter, following a 1.4% increase in the first quarter (see below). Consumer spending, the largest contributor in the calculation of GDP, rose 2.8%, with spending rising in durable goods, nondurable goods, and services. Private investments, another key component of GDP, also increased. Consumer confidence (see below) grew in July after trending lower in May.
Job growth notably slowed over the past several months. Although job gains exceeded expectations in June (see below), downward revisions to estimates for April and May clearly show that average monthly gains in the second quarter of the year (177,000) are well below the average gains in the first quarter (267,000). Wage growth has changed little throughout the year. The 12-month rate for the period ended in June (3.9%) was only 0.2 percentage points lower than the rate for the period ended in May. New weekly unemployment claims decreased from a year ago, while total claims paid increased (see below).
Nearing the midpoint of Q2 corporate earnings season, S&P 500 companies are reporting mixed results. About 41% of the S&P 500 companies have reported results. Of those companies, 78% reported earnings per share (EPS) above estimates, which is in line with the five-year average of 77% and higher than the 10-year average of 74%. Overall, as of July 26, the index reported an earnings growth rate of 9.8%, which is above the 8.9% growth rate for the three months ended in June. Eight of the 11 sectors are reporting year-over-year growth, with four of these eight sectors reporting double-digit growth: communication services, information technology, financials, and health care. On the other hand, three sectors are reporting a year-over-year decline in earnings, led by the Materials sector.
Sales of both existing homes and new homes declined in July (see below). Higher mortgage rates have slowed sales, with inventory expanding and the sales process lengthening. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.77% as of July 18. That’s down from 6.89% one week ago and 6.78% one year ago.
Industrial production expanded in June for the second straight month (see below). Manufacturing output increased in June and was 1.1% above its year-earlier level. Within manufacturing, durable manufacturing was unchanged in June, while nondurable manufacturing increased 0.8%. According to the latest survey from the S&P Global US Manufacturing Purchasing Managers’ Index™, the manufacturing sector perked up in June, while the services sector saw business accelerate at a quicker pace than in May.
Bond yields gained as bond prices declined in July. Ten-year Treasury yields generally closed the month lower. The two-year Treasury yield fell nearly 50 basis points to about 4.26% on the last day of July. The dollar slipped lower against a basket of world currencies. Gold prices climbed higher. Crude oil prices declined, influenced by ongoing unrest in the Middle East and waning Chinese demand. The retail price of regular gasoline was $3.484 per gallon on July 29, $0.046 above the price a month earlier but $0.273 less than the price a year ago.
Stock Market Indexes
Market/Index
2023 Close
Prior Month
As of July 31
Monthly Change
YTD Change
DJIA
37,689.54
39,118.86
40,842.79
4.41%
8.37%
Nasdaq
15,011.35
17,732.60
17,599.40
-0.75%
17.24%
S&P 500
4,769.83
5,460.48
5,522.30
1.13%
15.78%
Russell 2000
2,027.07
2,047.69
2,254.48
10.10%
11.22%
Global Dow
4,355.28
4,677.14
4,811.50
2.87%
10.48%
fed. funds target rate
5.25%-5.50%
5.25%-5.50%
5.25%-5.50%
0 bps
0 bps
10-year Treasuries
3.86%
4.34%
4.10%
-24 bps
24 bps
US Dollar-DXY
101.39
105.88
104.09
-1.69%
2.66%
Crude Oil-CL=F
$71.30
$81.51
$78.53
-3.66%
10.14%
Gold-GC=F
$2,072.50
$2,335.00
$2,494.20
6.82%
20.35%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.
Latest Economic Reports
Employment: June jobs data came in above expectations. Total employment increased by 206,000 in June, similar to the average monthly gain of 220,000 over the prior 12 months. The June increase followed downward revisions in both April and May, which totaled 111,000. In June, job gains occurred in government, health care, social assistance, and construction. In June, the unemployment rate increased 0.1 percentage point to 4.0% and was 0.3 percentage point above the rate from a year earlier (3.7%). The number of unemployed persons was relatively unchanged at 6.6 million. In June, the number of long-term unemployed (those jobless for 27 weeks or more), at 1.5 million, rose by 166,000 and accounted for 22.2% of all unemployed people. The labor force participation rate, at 62.6%, was 0.1 percentage point above the prior month’s estimate, while the employment-population ratio, at 60.1%, was unchanged from the previous month. In June, average hourly earnings increased by $0.10, or 0.3%, to $35.00. Since June 2023, average hourly earnings rose by 3.9%, which is down from the May figure of 4.1%. The average workweek was unchanged at 34.3 hours in June for the third straight month.
There were 235,000 initial claims for unemployment insurance for the week ended July 20, 2024. During the same period, the total number of workers receiving unemployment insurance was 1,851,000. A year ago, there were 231,000 initial claims, while the total number of workers receiving unemployment insurance was 1,765,000.
FOMC/interest rates: The Federal Open Market Committee met at the end of July. Following that meeting, the Committee kept interest rates at their current levels. However, the meeting statement indicated that, although economic activity continued to expand at a solid pace, job gains had moderated, and the unemployment rate had moved up but remained low. In addition, inflation had eased but remained somewhat elevated. The FOMC noted that while some further progress had been made toward achieving the Committee’s 2.0% target, they are still looking for further evidence that inflation is moving sustainably toward 2.0%. Nevertheless, it appears that, unless inflationary pressures spike, the Committee is likely to consider reducing interest rates following its September meeting.
GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 2.8% in the second quarter of 2024, according to the initial estimate from the Bureau of Economic Analysis. GDP increased 1.4% in the first quarter. While the second-quarter estimate is based on incomplete data, it, nevertheless, rose by more than expected. Personal consumption expenditures rose 2.3% in the second quarter compared to a 1.5% increase in the previous quarter. Consumer spending on goods increased 2.5%, while spending on services rose 2.2%. Gross domestic investment advanced 8.4% in the second quarter, well above the 4.4% increase in the first quarter. Nonresidential (business) fixed investment advanced 5.2% in the second quarter (4.4% in the first quarter), while residential fixed investment decreased 1.4% compared to a 16.0% increase in the first quarter. Exports climbed 2.0%, while imports, which are a negative in the calculation of GDP, increased 6.9%. Consumer prices rose 2.6% in the second quarter, compared with an increase of 3.4% in the previous quarter. Excluding food and energy prices, the PCE price index increased 2.9% compared with an increase of 3.7% in the first quarter.
The federal budget deficit in June was $66.0 billion following May’s surplus of $347.0 billion. In June, government receipts totaled $466.0 billion, while government outlays were $532.0 billion. Through the first nine months of fiscal year 2024, the total deficit sits at $1,268.0 trillion, which is roughly $125.0 billion lower than the deficit through the first nine months of the previous fiscal year.
Inflation/consumer spending: Personal income increased 0.2% in June (0.4% in May). Disposable personal income (less taxes) also rose 0.2% (0.4% in May). Personal spending, as measured by personal consumption expenditures, rose 0.3% in June (0.4% in May). The PCE price index, a measure of inflation, increased 0.1% in June after registering no gain in May. Excluding food and energy, the PCE price index increased 0.2% (0.1% in May). From a year ago, the PCE price index rose 2.5% (0.1% less than the May estimate) and 2.6% when excluding food and energy.
The Consumer Price Index (CPI) declined 0.1% in June after being unchanged in May. Over the 12 months ended in June, the CPI rose 3.0%, down 0.3 percentage point from the 12-month period ended in May. Excluding food and energy, the CPI rose 0.1% in June, (0.2% in May), and 3.3% from June 2023, which is the smallest 12-month increase since April 2021. In June, prices for food rose 0.2% (2.2% for the year), while prices for shelter increased 0.2% (the smallest monthly increase since August 2021) and 5.2% over the past 12 months, which is the lowest year-over-year increase since the period ended in April 2022. Energy prices declined 2.0% in June, while gasoline prices decreased 3.8%. The Fed should pay particular attention to the decline in shelter costs, which compose about one-third of the CPI basket of goods and services.
While prices paid by consumers may have moderated in June, prices that producers received for goods and services increased 0.2% in June after being unchanged in May. The June increase was attributable to a 0.6% jump in prices for services. Prices for goods fell 0.5% in June after declining 0.8% in May. Nearly all of the June increase in prices for services was attributable to a 1.9% increase in margins for trade services, which measure changes in margins received by wholesalers and retailers. Prices for gasoline declined 5.8% in June. Over the last 12 months, producer prices have increased 2.6%, up from 2.4% for the 12 months ended in May. Excluding food and energy, producer prices increased 3.0% for the year ended in June, which is the highest 12-month increase since April 2023.
Housing: Sales of existing homes fell 5.4% in June and 5.4% over the last 12 months. According to the National Association of Realtors® (NAR), the market for existing homes is slowly shifting from a seller’s market to a buyer’s market. The pace of sales is waning slightly and sellers are receiving fewer offers. Inventory is rising on a national basis. Unsold inventory of existing homes in June represented a 4.1-month supply at the current sales pace, up from 3.7 months in May. The median existing-home price was at an all-time high of $426,900 in June, up from the May estimate of $417,200, and 4.1% above the June 2023 price of $410,100. Sales of existing single-family homes decreased 5.1% in June and 4.3% from the prior year. The median existing single-family home price was $432,700 in June, up from $422,400 in May and well above the June 2023 estimate of $415,700.
New single-family home sales also declined in June, falling 0.6% below the May estimate and 7.4% under the June 2023 rate. The median sales price of new single-family houses sold in June was $417,300 ($407,100 in May). The June average sales price was $487,200 ($504,500 in May). The inventory of new single-family homes for sale in June represented a supply of 9.3 months at the current sales pace, up from 9.1 months in May.
Manufacturing: Industrial production rose 0.6% in June, following a 0.9% advance in May. Manufacturing output increased 0.4% in June after climbing 1.0% in May. Mining increased 0.3% in June, while utilities advanced 2.8%. For the 12 months ended in June, total industrial production advanced 1.6% from its year-earlier level. Over the same period, manufacturing increased 1.1%, mining decreased 0.6%, while utilities increased 7.9%.
New orders for durable goods declined 6.6% in June, following four consecutive monthly increases. Excluding transportation, new orders increased 0.5% in June. Excluding defense, new orders fell 7.0%. Transportation equipment, down 20.5%, drove the overall decrease in new orders. Cancellations of new orders for private aircraft largely contributed to the drop in transportation equipment. In fact, new orders for nondefense aircraft and parts fell 127.2% in June.
Imports and exports: U.S. import prices were unchanged in June after decreasing 0.2% in May. Lower import fuel prices (-1.0%) in June offset higher nonfuel prices (0.2%). Import prices advanced 1.6% over the last 12 months, the largest 12-month increase since December 2022. Export prices decreased 0.5% in June after declining 0.7% the previous month. The June and May drops were the first one-month decreases since December 2023. Lower prices for nonagricultural exports in both months more than offset higher agricultural prices. Despite the recent declines, prices for exports advanced 0.7% over the past 12 months.
The international trade in goods deficit was $96.8 billion in June, down $2.5 billion, or 2.5%, from May. Exports of goods were $172.3 billion in June, $4.3 billion, or 2.5%, more than in May. Imports of goods were $269.2 billion in June, $1.7 billion, or 0.7%, above the May estimate. Since June 2023, exports increased 5.7%, while imports increased 6.9%.
The latest information on international trade in goods and services, released July 3, is for May and revealed that the goods and services trade deficit was $75.1 billion, up $0.6 billion, or 0.8%, from the April deficit. May exports were $261.7 billion, 0.7% less than April exports. May imports were $336.7 billion, 0.3% below April’s estimate. Year to date, the goods and services deficit increased $14.4 billion, or 4.2%, from the same period in 2023. Exports increased $42.8 billion, or 3.4%. Imports increased $57.2 billion, or 3.6%.
International markets: Global inflation seems to be trending lower and some central banks are beginning to ease interest rate restrictions in response. The national banks of China and Canada cut interest rates in July, while there’s an increasing likelihood that the Bank of England will follow suit in early August. On the other hand, the Bank of Japan raised its benchmark interest rate, but not in response to growing inflationary concerns. Instead, the decision to hike rates was due to concerns over the historically weak yen. Japanese officials are hopeful that raising interest rates could push up the yen and spur economic growth. For July, the STOXX Europe 600 Index rose 0.72%; the United Kingdom’s FTSE gained 2.3%; Japan’s Nikkei 225 Index fell 3.6%; and China’s Shanghai Composite Index declined 1.5%.
Consumer confidence: Consumer confidence rose in July to 100.3, from a downwardly revised 97.8 in June, according to the Conference Board Consumer Confidence Index®. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, decreased to 133.6 in June, down from 135.3 in the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, increased to 78.2 in July, up from 72.8 in June. The Expectations Index has been below 80 (the threshold which usually signals a recession ahead) for six consecutive months.
Eye on the Month Ahead
All eyes will be on the inflation data released in August for July. Inflationary pressures resumed a downward trend, and if it continues, the Fed, which does not meet in August, may be more inclined to lower interest rates when it meets next in September.
Stocks were mixed last week, with the Dow and the Russell 2000 adding value, while the Nasdaq, the S&P 500, and the Global Dow ended the week in the red. Tech shares took a hit as investors prepared for this week’s earnings data from four megacap giants. For the week, communication services, information technology, and energy closed lower among the market sectors. Health care and utilities posted the largest gains. The June personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation, was somewhat encouraging (see below). While the data is not favorable enough for the Fed to lower interest rates next week, it is trending in the right direction to lead to a possible interest rate cut in September. Crude oil prices declined on rising expectations of a cease-fire in Gaza and growing concerns on waning demand in China.
Tech shares rebounded from last week’s sell-off last Monday as traders assessed the political landscape after President Joe Biden ended his bid for re-election. The small caps of the Russell 2000 (1.7%) and the Nasdaq (1.6%) led the benchmark indexes listed here, while the S&P 500 advanced 1.1%. The Global Dow climbed 0.5%, and the Dow added 0.3%. Yields on 10-year Treasuries ticked up 2.1 basis points to 4.26%. Crude oil prices dipped to $79.95 per barrel. The dollar and gold prices moved marginally.
Last Tuesday saw stocks edge lower as investors awaited earnings data from major tech companies. Of the benchmark indexes listed here, only the Russell 2000 added value after gaining 1.0%. The remaining indexes dipped 0.2% or less. Ten-year Treasury yields slid to 4.23%. Crude oil prices continued to fall, dropping $1.13 to close at $77.27 per barrel. The dollar inched up 0.1%, while gold prices rose 0.6%.
Stocks fell last Wednesday after underwhelming megacap earnings led to a tech sell-off. The Nasdaq (-3.6%) suffered its worst single trading day since October 2022, while the S&P 500 (-2.3%) had its worst day since December 2022. The Russell 2000 fell 2.1%, the Dow dropped 1.3%, and the Global Dow lost 0.9%. Ten-year Treasury yields rose 4.7 basis points to 4.28%. Crude oil prices ended several days of declines, rising to $77.54 per barrel. The dollar dipped 0.1%, and gold prices fell 0.3%.
The Nasdaq (-0.9%) continued its tailspin last Thursday, while the small caps of the Russell 2000 gained 1.3%. The Dow ended the session up 0.2%. The Global Dow (-0.7%) and the S&P 500 (-0.5%) declined. Bond prices rose, pulling yields lower, with the 10-year note falling 3.0 basis points to 4.25%. Crude oil prices increased for the second straight day, settling at $78.12 per barrel. The dollar was flat, while gold prices slid 2.3%.
Stocks enjoyed a solid day last Friday, with each of the benchmark indexes posting gains. The Russell 2000 advanced 1.7%, followed by the Dow (1.6%), the S&P 500 (1.1%), the Nasdaq (1.0%), and the Global Dow (0.9%). Ten-year Treasury yields slipped to 4.20%. Crude oil prices fell to $76.81 per barrel. The dollar was flat, while gold prices rose 1.4%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 7/26
Weekly Change
YTD Change
DJIA
37,689.54
40,287.53
40,589.34
0.75%
7.69%
Nasdaq
15,011.35
17,726.94
17,357.88
-2.08%
15.63%
S&P 500
4,769.83
5,505.00
5,459.10
-0.83%
14.45%
Russell 2000
2,027.07
2,184.35
2,260.07
3.47%
11.49%
Global Dow
4,355.28
4,760.35
4,753.88
-0.14%
9.15%
fed. funds target rate
5.25%-5.50%
5.25%-5.50%
5.25%-5.50%
0 bps
0 bps
10-year Treasuries
3.86%
4.23%
4.20%
-3 bps
34 bps
US Dollar-DXY
101.39
104.38
104.31
-0.07%
2.88%
Crude Oil-CL=F
$71.30
$80.26
$76.81
-4.30%
7.73%
Gold-GC=F
$2,072.50
$2,401.10
$2,385.40
-0.65%
15.10%
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
According to the first, or advanced, estimate gross domestic product increased 2.8% in the second quarter. GDP rose 1.4% in the first quarter. The increase in GDP primarily reflected increases in consumer spending (2.3%), private inventory investment (8.4%), and nonresidential fixed investment (5.2%). Imports (6.9%), which are a subtraction in the calculation of GDP, increased. The personal consumption expenditures (PCE) price index, a measure of inflation, increased 2.6%, compared with an increase of 3.4% in the first quarter. Excluding food and energy prices, the PCE price index increased 2.9%, compared with an increase of 3.7% in the previous quarter.
The PCE price index inched up 0.1% in June and 2.5% over the last 12 months. In May, the PCE price index was unchanged, and the 12-month rate was 2.6%. Excluding food and energy, the PCE price index rose 0.2% in June and 2.6% for the year. Last month, both personal income and disposable (after-tax) personal income rose 0.2%. Personal consumption expenditures, a measure of consumer spending, advanced 0.3% in June.
New orders for manufactured durable goods decreased 6.6% in June following four consecutive monthly increases. Excluding transportation, new orders increased 0.5%. Excluding defense, new orders decreased 7.0%. Transportation equipment, down two of the last three months, drove the overall decrease, falling 20.5%. New orders for nondefense capital goods fell 22.4% last month, while new orders for defense capital goods increased 6.1%.
The international trade in goods deficit decreased 2.5% in June. Exports of goods in June rose 2.5%. Imports of goods in June inched up 0.7%.
Existing-home sales slumped in June, falling 5.4% below the May rate and 5.4% below the estimate from a year earlier. According to the National Association of Realtors®, homes are sitting on the market a bit longer, and sellers are receiving fewer offers. Total housing inventory was at a 4.1-month supply in June, up from 3.7 months in May. The last time unsold inventory posted a four-month supply was May 2020. The median existing-home sales price in June, at $426,900, reached a new record high, rising from $417,200 in May and well above the June 2023 price of $410,100. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.77% as of July 18. That’s down from 6.89% one week ago and 6.78% one year ago. Sales of existing single-family homes declined 5.1% from a month earlier and dropped 4.3% from June 2023.
Sales of new single-family homes fell 0.6% in June from a month earlier and were 7.4% below the June 2023 estimate. The median sales price of new houses sold in June 2024 was $417,300. The average sales price was $487,200. Inventory represented a supply of 9.3 months at the current sales rate. The median existing single-family home price in June was $432,700, up from May’s estimate of $422,400 and above the June 2023 price of $415,700.
The national average retail price for regular gasoline was $3.471 per gallon on July 22, $0.025 per gallon under the prior week’s price, and $0.125 per gallon less than a year ago. Also, as of July 22, the East Coast price fell $0.057 to $3.409 per gallon; the Midwest price increased $0.057 to $3.426 per gallon; the Gulf Coast price decreased $0.063 to $3.047 per gallon; the Rocky Mountain price declined $0.063 to $3.323 per gallon; and the West Coast price decreased $0.054 to $4.137 per gallon.
For the week ended July 20, there were 235,000 new claims for unemployment insurance, a decrease of 10,000 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 July 13 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended July 13 was 1,851,000, a decrease of 9,000 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 July 6 were New Jersey (2.8%), Rhode Island (2.7%), Puerto Rico (2.4%), California (2.3%), Minnesota (2.2%), Massachusetts (1.9%), Pennsylvania (1.9%), Connecticut (1.8%), Washington (1.8%), Illinois (1.7%), Nevada (1.7%), and New York (1.7%). The largest increases in initial claims for unemployment insurance for the week ended July 13 were in Texas (+11,927), California (+6,284), Georgia (+3,101), Missouri (+2,999), and South Carolina (+2,413), while the largest decreases were in New Jersey (-1,532), Massachusetts (-1,531), Indiana (-1,407), Tennessee (-937), and Iowa (-853).
Eye on the Week Ahead
The Federal Open Market Committee meets this week, and while it is highly unlikely that the Fed will adjust interest rates at this time, the Committee might provide a more concrete indication as to when rates may be lowered. The employment data for July is also out this week. The labor sector has been steady during the period as the Fed tries to harness inflation.
The market saw stocks come in with mixed returns. The Dow and the Russell 2000 advanced, while the Nasdaq, the S&P 500, and the Global Dow lost value. The Dow reached three new records during the week, while the Nasdaq and the S&P 500 posted their worst week since April. AI stocks led a downturn in tech shares as investors moved to small caps. The CrowdStrike outage impacted flights, banks, telecoms, and media companies worldwide. The market sectors ran the gambit of highs and lows, with energy (1.7%), financials (1.3%), and real estate (1.3%) climbing, while information technology (-4.6%) and communication services (-2.8%) declined. Ten-year Treasury yields rose 5.0 basis points. Crude oil prices declined on demand worries centered on China. The dollar inched up, while gold prices dipped lower.
Wall Street began last week on a high note, with each of the benchmark indexes listed here closing higher. The Dow reached a record high after climbing 0.5%. The Nasdaq gained 0.4%, the S&P 500 added 0.3%, while the big gainer was the Russell 2000, which advanced 1.8%. The Global Dow ticked down 0.2%. Ten-year Treasury yields rose 4.0 basis points to reach 4.81%. Crude oil prices fell $0.31 to settle at $81.90 per barrel. The dollar and gold prices rose 0.1% and 0.2%, respectively.
Stocks pushed higher for the second straight day last Tuesday. The small caps of the Russell 2000 gained 3.5%, followed by the Dow, which added 1.9% to record a new record. The S&P 500 rose 0.6%, the Global Dow advanced 0.5%, and the Nasdaq ticked up 0.2%. Industrial stocks made notable gains, while several companies reported better-than-expected second-quarter earnings. Yields on 10-year Treasuries slid to 4.16%. Crude oil prices fell again, closing at about $80.87 per barrel on weaker economic data from China. The dollar was unchanged, while gold prices rose 1.8%.
Last Wednesday saw the Dow (0.6%) continue its record streak, and the Global Dow ticked up 0.2%. The remaining benchmark indexes listed here declined, with the Nasdaq falling 2.8%, marking the worst day for that index since 2022. The S&P 500 dropped 1.4%, and the Russell 2000 lost 1.1%. Ten-year Treasury yields slid to 4.14%. Crude oil prices reversed a run of losses after gaining $2.14 to settle at $82.90 per barrel. The dollar fell 0.5%, and gold prices lost 0.3%.
Wednesday’s tech rout continued last Thursday. The small caps of the Russell 2000 lost 1.9%, while the Dow, which had a run of record highs, fell 1.3%. The S&P 500 lost 0.8%, while the Nasdaq and the Global Dow declined 0.7%. Investors took profits from tech shares in response to the potential negative impact export restrictions to China may have on the semiconductor market. Yields on 10-year Treasuries climbed to 4.18%. Crude oil prices slid to $82.29 per barrel. the dollar gained 0.42%, while gold prices fell 0.7%.
Last Friday saw stocks close mostly lower, likely impacted by the CrowdStrike IT outage, which caused major disruptions worldwide. The Global Dow fell 1.0%, while the Dow fell 0.9%. The Nasdaq (-0.8%) and the S&P 500 (-0.7%) lost value for the third straight day. The Russell 2000 dropped 0.6%. Ten-year Treasury yields added 5.0 basis points to close at 4.23%. Crude oil prices dipped $2.56 to settle at $80.26 per barrel. The dollar inched up 0.2%, while gold prices fell 2.3%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 7/19
Weekly Change
YTD Change
DJIA
37,689.54
40,000.90
40,287.53
0.72%
6.89%
Nasdaq
15,011.35
18,398.45
17,726.94
-3.65%
18.09%
S&P 500
4,769.83
5,615.35
5,505.00
-1.97%
15.41%
Russell 2000
2,027.07
2,148.27
2,184.35
1.68%
7.76%
Global Dow
4,355.28
4,820.88
4,760.35
-1.26%
9.30%
fed. funds target rate
5.25%-5.50%
5.25%-5.50%
5.25%-5.50%
0 bps
0 bps
10-year Treasuries
3.86%
4.18%
4.23%
5 bps
37 bps
US Dollar-DXY
101.39
104.09
104.38
0.28%
2.95%
Crude Oil-CL=F
$71.30
$82.25
$80.26
-2.42%
12.57%
Gold-GC=F
$2,072.50
$2,416.40
$2,401.10
-0.63%
15.86%
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 in June were virtually unchanged from the previous month but were up 2.3% from a year earlier. Retail sales less motor vehicle and parts and gasoline stations rose 0.8% in June. Retail trade sales dipped 0.1% in June but rose 2.0% from June 2023. Nonstore retail sales rose 1.9% in June and 8.9% over the last 12 months.
Import prices were unchanged in June after falling 0.2% in May. Lower import fuel prices in June offset higher nonfuel prices. Import fuel prices decreased 1.0% in June. Import prices advanced 1.6% for the year ended in June, the largest 12-month increase since December 2022. Export prices decreased 0.5% last month following a 0.7% drop in May. The May and June declines were the first one-month decreases since December 2023. Export prices advanced 0.7% over the past 12 months.
The number of residential building permits issued in June rose 3.4% from the May rate but were 3.1% below the June 2023 estimate. Building permits for single-family homes declined 2.3% last month. Housing starts increased 3.0% in June, while falling 4.4% over the last 12 months. Single-family housing starts slid 2.2% below the May figure. Housing completions in June were 10.1% above the May estimate and 15.5% over the June 2023 rate. Single-family housing completions in June were 1.8% above the prior month’s estimate.
Industrial production rose 0.6% in June after advancing 0.9% in May. For the second quarter, industrial production increased 4.3%. Manufacturing output advanced 0.4% last month and 1.1% for the year. In June, mining rose 0.3%, and utilities increased 2.8%. Since June 2023, mining dipped 0.6%, while utilities advanced 7.9%. Total industrial production in June was 1.6% above its year-earlier level.
The national average retail price for regular gasoline was $3.496 per gallon on July 15, $0.007 per gallon above the prior week’s price but $0.063 per gallon less than a year ago. Also, as of July 15, the East Coast price rose $0.016 to $3.466 per gallon; the Midwest price increased $0.002 to $3.369 per gallon; the Gulf Coast price advanced $0.052 to $3.110 per gallon; the Rocky Mountain price decreased $0.045 to $3.486 per gallon; and the West Coast price declined $0.035 to $4.191 per gallon.
For the week ended July 13, there were 243,000 new claims for unemployment insurance, an increase of 20,000 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 July 6 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended July 6 was 1,867,000, an increase of 20,000 from the previous week’s level, which was revised down by 5,000. 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 29 were New Jersey (2.6%), Rhode Island (2.2%), California (2.1%), Minnesota (2.0%), Puerto Rico (2.0%), Pennsylvania (1.8%), Connecticut (1.7%), Massachusetts (1.7%), Washington (1.7%), Illinois (1.6%), Nevada (1.6%), and New York (1.6%). The largest increases in initial claims for unemployment insurance for the week ended July 6 were in Michigan (+10,578), New York (+5,247), Indiana (+2,835), Ohio (+1,604), and Tennessee (+1,166), while the largest decreases were in California (-5,672), New Jersey (-5,517), Georgia (-1,900), Texas (-1,809), and Minnesota (-1,078).
Eye on the Week Ahead
There’s plenty of market-moving economic data out this week. June reports on sales of both new and existing homes are available. May saw sales of new homes rise, while existing home sales declined. The initial report for second quarter gross domestic product follows a 1.4% advance in the first quarter. The report on personal income and expenditures is also available this week. The personal consumption expenditures price index, a measure of inflation preferred by the Federal Reserve, was flat in May.
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
Market/Index
2023 Close
Prior Week
As of 7/12
Weekly Change
YTD Change
DJIA
37,689.54
39,375.87
40,000.90
1.59%
6.13%
Nasdaq
15,011.35
18,352.76
18,398.45
0.25%
22.56%
S&P 500
4,769.83
5,567.19
5,615.35
0.87%
17.73%
Russell 2000
2,027.07
2,026.73
2,148.27
6.00%
5.98%
Global Dow
4,355.28
4,755.64
4,820.88
1.37%
10.69%
fed. funds target rate
5.25%-5.50%
5.25%-5.50%
5.25%-5.50%
0 bps
0 bps
10-year Treasuries
3.86%
4.27%
4.18%
-9 bps
32 bps
US Dollar-DXY
101.39
104.87
104.09
-0.74%
2.66%
Crude Oil-CL=F
$71.30
$83.25
$82.25
-1.20%
15.36%
Gold-GC=F
$2,072.50
$2,397.40
$2,416.40
0.79%
16.59%
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%.
What I'm Watching This Week 