Investors finally heard what they had been waiting for after Federal Reserve Chair Jerome Powell gave clear indications that the central bank will lower interest rates in September. Powell noted that the labor market has cooled and inflation is slowing. In an up and down week for stocks, each of the benchmark indexes listed here ended up closing higher, led by the RUSSELL 2000. Crude oil prices rallied at the end of the week, but not enough to avoid closing in the red. Typically, falling interest rates stimulate economic growth, which includes rising demand for oil. However, worldwide energy demand, particularly in China, has waned, keeping oil prices somewhat muted. Ten of the 11 market sectors closed higher, led by materials, consumer discretionary, and financials. Energy ticked lower.
Last Monday saw stocks continue to build off of the prior week’s gains. The S&P 500 (1.4%) and the NASDAQ (1.0%) moved higher for the eighth straight session, the longest streak of the year. The small caps of the RUSSELL 2000 gained 1.2%, the GLOBAL DOW advanced 1.0%, and the DOW added 0.6%. The dollar fell 0.6% to a seven-month low, as signs of waning inflation furthered expectations of an interest rate cut next month. Ten-year Treasury yields dipped to 3.86%. Crude oil prices fell nearly 3.0% to $74.52 per barrel on weak Chinese demand. Gold prices rose 0.2%.
The winning streak for the S&P 500 and the NASDAQ ended at eight days following last Tuesday’s downturn. The RUSSELL 2000 declined 1.2%, the Nasdaq fell 0.3%, the S&P 500 dipped 0.2%, the Dow and the Global Dow slipped 0.1%. Investors pulled back from stocks ahead of the upcoming Jackson Hole symposium, highlighted by a speech from Fed Chair Jerome Powell. Among the market sectors, health care and consumer staples performed the best, while energy and materials were among the worst performers. Yields on 10-year Treasuries continued to decline, settling at 3.81%. Crude oil prices dropped to $73.82 per barrel. The dollar fell 0.5% against a basket of currencies. Gold prices rose 0.5%.
Stocks rallied modestly last Wednesday as minutes from the July Federal Reserve meeting indicated that policymakers would consider easing the restrictive economic policy in place (i.e., lower interest rates) in September. The RUSSELL 2000 recouped most of the prior day’s losses after gaining 1.3%. The NASDAQ rose 0.6%, while the S&P 500 and the GLOBAL DOW gained 0.4%. The DOW inched up 0.1%. Crude oil prices closed in the red, settling at $71.94 per barrel. Ten-year Treasury yields dipped to 3.77%. The dollar declined 0.3%, while gold prices were relatively unchanged.
Volatile continued to best describe the stock market last week. After moving higher last Monday, equities declined on Tuesday, rebounded on Wednesday, and fell on Thursday. Investors awaited Fed Chair Jerome Powell’s Jackson Hole speech with apprehension. While the minutes from the July meeting seemed to support an interest rate decrease, investors may be looking for a more definitive indication from Powell. A drop in tech shares pulled the NASDAQ down 1.7%. The RUSSELL 2000 fell 1.0%, the S&P 500 lost 0.9%, the DOW declined 0.4%, and the GLOBAL DOW dipped 0.3%. Ten-year Treasury yields rose to 3.86%. Crude oil prices climbed 1.4% to $72.94 per barrel. The dollar gained 0.5%, while gold prices edged lower.
Stocks posted solid gains following Fed Chair Powell’s speech. The RUSSELL 2000 gained 3.2% and the NASDAQ rose 1.5%. The S&P 500 and the GLOBAL DOW added 1.2%, while the DOW advanced 1.1%. Ten-year Treasury yields closed at 3.80%, as they approached their lowest level in 14 months. Crude oil prices rose 2.6%, the dollar fell 0.8%, and gold prices rose 1.2%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 8/23
Weekly Change
YTD Change
DJIA
37,689.54
40,659.76
40,712.78
0.13%
8.02%
NASDAQ
15,011.35
17,631.72
17,877.79
1.40%
19.10%
S&P 500
4,769.83
5,554.25
5,634.61
1.45%
18.13%
RUSSELL 2000
2,027.07
2,141.92
2,218.70
3.58%
9.45%
GLOBAL DOW
4,355.28
4,806.79
4,847.19
0.84%
11.29%
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%
3.89%
3.80%
-9 bps
-6 bps
US Dollar-DXY
101.39
102.44
100.70
-1.70%
-0.68%
Crude Oil-CL=F
$71.30
$76.77
$74.90
-2.44%
5.05%
Gold-GC=F
$2,072.50
$2,547.20
$2,546.50
-0.03%
22.87%
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
Sales of existing homes increased in July for the first time since February. Existing home sales rose 1.3% in July. Year over year, sales were down 2.5%. Total inventory sat at a 4.0-month supply. The median existing home price was $422,600 in July, down from June’s $426,900 but above the July 2023 price of $405,600. Sales of single-family homes advanced 1.4% in July but declined 1.4% from a year ago. The median existing single-family home price was $428,500 last month, down from the June estimate of $432,900 but above the July 2023 price of $411,200. As of August 15, the 30-year fixed-rate mortgage averaged 6.49%, according to Freddie Mac, which was up from 6.47% one week ago, but down from 7.09% from a year ago.
Sales of new single-family homes also picked up steam in July, climbing 10.6% for the month and 5.6% above the total from the previous year. The median sales price of new houses sold in July was $429,800. The average sales price was $514,800. The inventory of new single-family homes available for sale represented a 7.5-month supply at the current sales rate.
The national average retail price for regular gasoline was $3.382 per gallon on August 19, $0.032 per gallon under the prior week’s price and $0.486 per gallon less than a year ago. Also, as of August 19, the East Coast price fell $0.027 to $3.299 per gallon; the Midwest price decreased $0.072 to $3.322 per gallon; the Gulf Coast price dipped $0.003 to $2.996 per gallon; the Rocky Mountain price increased $0.057 to $3.471 per gallon; and the West Coast price decreased $0.014 to $4.058 per gallon.
For the week ended August 17, there were 232,000 new claims for unemployment insurance, an increase of 4,000 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 10 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended August 10 was 1,863,000, an increase of 4,000 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 August 3 were New Jersey (2.8%), Puerto Rico (2.6%), Rhode Island (2.6%), California (2.2%), Minnesota (2.0%), Pennsylvania (1.9%), Connecticut (1.8%), Massachusetts (1.7%), Nevada (1.7%), New York (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended August 10 were in Georgia (+693), Michigan (+584), Virginia (+357), New Jersey (+339), and Kansas (+233), while the largest decreases were in California (-2,585), Texas (-1,438), Massachusetts (-972), Pennsylvania (-604), and Iowa (-508).
Eye on the Week Ahead
The second release of gross domestic product for quarter two is out this week. The initial estimate showed the economy expanded at an annualized rate of 2.8%. Also out this week is the report on personal income and outlays for July, which is also a potential market mover. One of the most important parts of the report is the personal consumption expenditures price index, a measure of inflation favored by the Federal Reserve. In June, consumer prices ticked up 0.1% and rose 2.5% for the year ended in June.
Wall Street rebounded after a rough start to the month, to close out its best week of the year. Investors saw alot of economic data that did little to change the expectations of an interest rate reduction in September. Last week’s gains ended four straight weeks of losses, fueled by concerns that the Federal Reserve hadn’t lowered interest rates soon enough to prevent a major economic slowdown. However, favorable inflation data, robust retail sales, and fewer unemployment claims reassured investors’ confidence, leading to a market rally. Each of the benchmark indexes listed here closed the week higher. All 11 of the S&P 500 market sectors gained ground, with information technology climbing more than 8.0%. Ten-year Treasury yields dipped lower as bond values advanced. Crude oil prices inched lower. The dollar declined, while gold prices increased.
Last Monday stocks closed generally lower as investors awaited upcoming inflation data later in the week. The Nasdaq edged up 0.2% and the S&P 500 closed flat. The remaining benchmark indexes listed here closed in the red, led by the Russell 2000, which lost 0.9%, followed by the Dow (-0.4%) and the Global Dow (-0.1%). Information technology, energy, and utilities posted gains, while real estate and communication services fell the furthest. Ten-year Treasury yields opened the week at 3.90%. Crude oil prices rose 3.6% to settle at $79.62 per barrel. The dollar was muted, while gold prices rose 1.6%.
Wall Street closed higher last Tuesday as investors assessed a lower-than-expected Producer Price Index (see below). Tech shares led the market uptick, helping to drive the Nasdaq (2.4%) higher. The remaining benchmarks listed here also posted solid gains. The S&P 500 rose 1.7%, followed by the Russell 2000 (1.6%), the Global Dow (1.3%), and the Dow (1.0%). Ten-year Treasury yields dipped 5.7 basis points to 3.85%. Crude oil prices ended a mini rally, falling to $78.49 per barrel. The dollar fell 0.5%, while gold prices ticked up 0.1%.
Investors were encouraged by the latest Consumer Price Index (see below), which matched expectations for July, but unexpectedly declined to 2.9% for the 12 months ended in July, the lowest 12-month rate since March 2021. The favorable inflation data helped push stocks generally higher last Wednesday. The Global Dow and the Dow led the benchmarks, each gaining 0.6%, followed by the S&P 500, which climbed 0.4%. The Nasdaq eked out a minimal gain of less than 0.1%, while the Russell 2000 fell 0.5%. Crude oil prices continued to trend lower, ending the sessionn at $77.09 per barrel after OPEC+ cut its 2024 demand forecast. Yields on 10-year Treasuries fell to 3.82%. The dollar edged up 0.1%, while gold prices fell 0.9%.
Last Thursday saw the release of another round of favorable economic data. Retail sales advanced (see below), while unemployment claims declined, bolstering investor confidence in the economy. Each of the benchmark indexes listed here posted solid gains, led by the Russell 2000, which advanced 2.5%. The Nasdaq rose 2.3%, followed by the S&P 500 (1.6%), the Dow (1.4%), and the Global Dow (0.9%). Bond prices fell as stock values rose. Ten-year Treasury yields climbed over 10.0 basis points, settling at 3.92%. Crude oil prices rose 1.3% to $77.96 per barrel. The dollar gained 0.4% and gold prices rose 0.5%.
Stocks pushed higher last Friday, with each index listed here posting gains. The Global Dow advanced 1.0% and the Russell 2000 rose 0.3%, while the Dow, the S&P 500, and the Nasdaq each gained about 0.2%. Ten-year Treasury yields slipped to 3.89%. The dollar and crude oil prices declined 0.5% and 1.8%, respectively. Gold prices rose 2.2%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 8/16
Weekly Change
YTD Change
DJIA
37,689.54
39,497.54
40,659.76
2.94%
7.88%
Nasdaq
15,011.35
16,745.30
17,631.72
5.29%
17.46%
S&P 500
4,769.83
5,344.16
5,554.25
3.93%
16.45%
Russell 2000
2,027.07
2,080.92
2,141.92
2.93%
5.67%
Global Dow
4,355.28
4,629.29
4,806.79
3.83%
10.37%
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%
3.94%
3.89%
-5 bps
3 bps
US Dollar-DXY
101.39
103.15
102.44
-0.69%
1.04%
Crude Oil-CL=F
$71.30
$76.97
$76.77
-0.26%
7.67%
Gold-GC=F
$2,072.50
$2,469.50
$2,547.20
3.15%
22.90%
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 rose 0.2% in July, in line with expectations. The CPI rose 2.9% for the year ended in July, down 0.1 percentage point from the 12 months ended in June. Nearly 90.0% of the July increase was attributable to a 0.4% advance in shelter prices. Energy prices were unchanged, while food prices increased 0.2%. Prices less food and energy also increased 0.2% in July and 3.2% over the last 12 months.
Producer prices edged up 0.1% in July after increasing 0.2% in June. Over the last 12 months, producer prices rose 2.2%, which is the lowest 12-month increase since May. Producer prices excluding foods, energy, and trade services increased 0.2% in July and 3.3% for the year ended in July. The increase in producer prices last month is largely attributable to a 0.6% increase in prices for goods, the largest increase since February. Prices for services decreased 0.2%, which marked the first monthly decline since December 2023.
Retail sales rose 1.0% in July after declining 0.2% in June. Retail sales advanced 2.7% for the 12 months ended in July. Retail trade sales were up 1.1% last month and 2.6% from last year. Sales, excluding motor vehicles and parts, rose 0.4% in July. Sales at motor vehicle and parts dealers climbed 3.6% in July. Nonstore (on line) sales ticked up 0.2% last month, while food services and drinking places sales edged up 0.3%.
Prices for imports ticked up 0.1% in July, after being unchanged the previous month. Prices for imports rose 1.6% for the year ended in July, the largest 12 month increase since the index advanced 3.2% for the 12 months ended in December 2022. Export prices increased 0.7% in July following a 0.3% decline in June. Higher nonagricultural prices in July more than offset lower prices for agricultural exports. The prices index for exports increased 1.4% over the past year, the largest 12-month advance since prices rose 2.0% for the 12 months ended in January 2023.
Industrial production fell 0.6% in July after increasing 0.3% in June. Early July shutdowns in petrochemical and related industries due to Hurricane Beryl held down the growth of industrial production by an estimated 0.3 percentage point. Manufacturing output stepped down 0.3% as the index for motor vehicles and parts fell nearly 8.0%. Manufacturing excluding motor vehicles and parts rose 0.3%. The index for mining was unchanged, while the index for utilities decreased 3.7%. Total industrial production in July was 0.2% below its year-earlier level.
The Treasury budget deficit for July was $243.7 billion, well above the June deficit of 71.0 billion. July receipts were $236.0 billion, while total outlays wee $574.1 billion. For the current fiscal year, the total deficit is $1,517.0 trillion. The deficit over the same period in the last fiscal year was $1,613.8 trillion.
In July, the number of issued building permits for residential construction decreased 4.0% from the June estimate, and 7.0% below the July 2023 rate. The number of building permits for single-family houses dipped 0.1% in July. Housing starts declined 6.8% in July and 16.0% below the rate from a year earlier. Single-family housing starts in July were 14.1% under the June figure. Housing completions decreased 9.8% in July, but were 13.8% above the July 2023 rate. Single-family housing completions in July were 0.5% above the June estimate.
The national average retail price for regular gasoline was $3.414 per gallon on August 12, $0.034 per gallon under the prior week’s price and $0.436 per gallon less than a year ago. Also, as of August 12, the East Coast price fell $0.049 to $3.326 per gallon; the Midwest price decreased $0.034 to $3.394 per gallon; the Gulf Coast price dipped $0.011 to $2.999 per gallon; the Rocky Mountain price declined $0.021 to $3.414 per gallon; and the West Coast price decreased $0.008 to $4.072 per gallon.
For the week ended August 10, there were 227,000 new claims for unemployment insurance, a decrease of 7,000 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 3 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended August 3 was 1,864,000, a decrease of 7,000 from the previous week’s level, which was revised down by 4,000. States and territories with the highest insured unemployment rates for the week ended July 27 were New Jersey (2.8%), Rhode Island (2.6%), Puerto Rico (2.5%), California (2.3%), Minnesota (2.0%), Connecticut (1.9%), Pennsylvania (1.9%), Massachusetts (1.8%), Illinois (1.7%), Nevada (1.7%), New York (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended August 3 were in New Jersey (+1,080), California (+694), Wisconsin (+672), New York (+607), and Illinois (+579), while the largest decreases were in Michigan (-7,430), Texas (-5,180), Missouri (-3,716), Virginia (-745), and Georgia (-493).
Eye on the Week Ahead
The real estate sector dominates the economic data released this week. Sales of both existing and new homes will look to rebound from a period of declining sales.
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.
Wall Street experienced a notable downturn last week, with each of the benchmark indexes closing sharply in the red. A weaker-than-expected jobs report, rising unemployment claims, disappointing corporate earnings from major tech firms, and falling manufacturing data prompted the major sell-off last week. Evidence of a slowing economy may prompt the Federal Reserve to cut interest rates in September, but many analysts and investors believe the Fed is behind the curve in cutting rates, especially when other central banks have already done so. There was a huge swing in the market sectors last week, where utilities (4.5%) and real estate (3.9%) turned sharply higher, while information technology (-4.1%), consumer discretionary (-3.8%), and energy (-3.4%) turned sharply lower. Bond prices jumped higher as demand increased, pulling yields lower. Ten-year Treasury yields fell to their lowest level since December 2023. Crude oil prices dropped by more than 3.5%, while gold prices climbed higher.
The week kicked off with the Nasdaq, the S&P 500, and the Global Dow ticking up minimally, while the Dow dipped 0.1% and the Russell 2000 fell 1.1%. Investors awaited the release of quarterly earnings from several tech companies, the outcome of the Federal Reserve’s latest meeting, and labor data for July. Bond prices held steady, with yields on 10-year Treasuries slipping to 4.17%. Crude oil prices continued to fade, down 1.7% to $75.83 per barrel. The dollar gained 0.2%, while gold prices were essentially unchanged.
Last Tuesday saw investors flee stocks, particularly tech shares, and move to bonds after an acceleration of the unrest in the Middle East and ahead of the Fed’s meeting on Wednesday. The tech-heavy Nasdaq lost 1.3%, while the S&P 500 fell 0.5% behind weakness in technology, consumer discretionary, and consumer staples. However, the Dow (0.5%), the Russell 2000 (0.4%), and the Global Dow (0.2%) moved higher. Demand for bonds drove prices up and pulled yields lower. Ten-year Treasury yields fell to 4.14%. Crude oil prices declined to $75.08 per barrel. The dollar was unchanged, while gold prices gained 1.2%.
Stocks closed up last Wednesday as investors were encouraged that interest rates may be reduced in September following statements from the Federal Open Market Committee and its chair, Jerome Powell. Each of the benchmark indexes listed here climbed higher, led by the Nasdaq (2.6%), followed by the S&P 500 (1.6%), the Global Dow (1.2%), the Russell 2000 (0.5%), and the Dow (0.2%). Tech stocks, which had been trending lower, reversed course, helping to drive the indexes higher. Ten-year Treasury yields dipped to 4.10%. The dollar fell nearly 0.5%, while gold prices rose 1.7%. Crude oil prices, which had been sinking, jumped 5.1% to $78.53 per barrel.
A sharp sell-off in chip stocks sent the markets reeling last Thursday. Each of the benchmark indexes ended the session firmly in the red, led by the Russell 2000 (-3.0%) and the Nasdaq (-2.3%). The remaining benchmarks fell between 1.2% and 1.6%. Ten-year Treasury yields declined 3.2%, or 13.3 basis points, settling at 3.97%, moving below the 4.00% level for the first time since February. Crude oil prices dropped to $76.90 per barrel. The dollar and gold prices gained 0.3% and 0.6%, respectively. Investors reacted to contraction in the manufacturing sector (see below) and jobless claims rising to an 11-month high.
Stocks plunged lower last Friday as investors saw unemployment claims rise and job gains fall. The interest-sensitive Russell 2000 lost 3.5%, followed by the Nasdaq (-2.4%), Global Dow (-2.1%), the S&P 500 (-1.8%), and the Dow (-1.5%). Ten-year Treasury yields dropped over 18.0 basis points, crude oil prices fell 2.9%, the dollar slipped 1.1%, while gold prices were unchanged.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 8/2
Weekly Change
YTD Change
DJIA
37,689.54
40,589.34
39,737.26
-2.10%
5.43%
Nasdaq
15,011.35
17,357.88
16,776.16
-3.35%
11.76%
S&P 500
4,769.83
5,459.10
5,346.56
-2.06%
12.09%
Russell 2000
2,027.07
2,260.07
2,109.31
-6.67%
4.06%
Global Dow
4,355.28
4,753.88
4,639.08
-2.41%
6.52%
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%
4.20%
3.79%
-41 bps
-7 bps
US Dollar-DXY
101.39
104.31
103.22
-1.04%
1.80%
Crude Oil-CL=F
$71.30
$76.81
$74.11
-3.52%
3.94%
Gold-GC=F
$2,072.50
$2,385.40
$2,480.00
3.97%
19.66%
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 met last week and decided to keep the target range at its current 5.25%-5.50%. However, it appears that if inflation continues to stabilize, the FOMC may lend more consideration to reducing interest rates when it next meets in September.
Employment slowed in July, according to the latest data from the Bureau of Labor Statistics. Employment rose by only 114,000 last month, well below the 12-month average of 215,000. In July, employment continued to trend up in health care, in construction, and in transportation and warehousing, while information lost jobs. The number of unemployed, at 7.2 million, increased by 352,000 over June’s estimate. The unemployment rate increased for the second straight month in July, ticking up 0.2 percentage point to 4.3%. Both the number of unemployed and the unemployment rate are above the July 2023 estimates, at 5.9 million and 3.5%, respectively. The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.5 million in July. This measure is up from 1.2 million a year earlier. The long-term unemployed accounted for 21.6% of all unemployed people in July. The labor force participation rate increased 0.1 percentage point to 62.7%, while the employment-population ratio dipped 0.1 percentage point to 60.0%. The May estimate was revised down by 2,000, from 218,000 to 216,000, and the change for June was revised down by 27,000, from 206,000 to 179,000. With these revisions, employment in May and June combined was 29,000 lower than previously reported. In July, average hourly earnings increased by $0.08, or 0.2%, to $35.07. Over the past 12 months, average hourly earnings have increased by 3.6%. The average workweek edged down by 0.1 hour to 34.2 hours in July.
According to the latest Job Openings and Labor Turnover Summary, the number of job openings, at 8.2 million, was unchanged in June from May but was 941,000 less than the estimate from a year earlier. The number of hires (5.3 million) fell by 314,000, and 554,000 over the year. The number of total separations (5.1 million) declined by 302,000 and 544,000 from a year earlier.
Manufacturing regressed in July as new orders declined for the first time in three months. The S&P Global US Manufacturing Purchasing Managers’ Index™ fell to 49.6 in July from 51.6 in June. A reading below 50.0 indicates contraction, which occurred for the first time in seven months. New orders decreased at the fastest pace in 2024. Some costs to manufacturers increased markedly in July as survey respondents noted increases in costs for energy, freight, labor, and raw materials. Nevertheless, the rate of overall cost inflation eased to a four-month low.
The national average retail price for regular gasoline was $3.484 per gallon on July 29, $0.013 per gallon over the prior week’s price but $0.273 per gallon less than a year ago. Also, as of July 29, the East Coast price fell $0.014 to $3.395 per gallon; the Midwest price increased $0.050 to $3.476 per gallon; the Gulf Coast price rose $0.047 to $3.094 per gallon; the Rocky Mountain price advanced $0.072 to $3.395 per gallon; and the West Coast price decreased $0.031 to $4.106 per gallon.
For the week ended July 27, there were 249,000 new claims for unemployment insurance, an increase of 14,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended July 20 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended July 20 was 1,877,000, an increase of 33,000 from the previous week’s level, which was revised down by 7,000. This is the highest level for insured unemployment since November 27, 2021, when it was 1,878,000. States and territories with the highest insured unemployment rates for the week ended July 13 were New Jersey (2.7%), Rhode Island (2.6%), Puerto Rico (2.4%), California (2.2%), Minnesota (2.0%), Connecticut (1.8%), Massachusetts (1.8%), Pennsylvania (1.8%), Illinois (1.7%), Nevada (1.7%), New York (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended July 20 were in Texas (+5,962), Tennessee (+769), Delaware (+259), and the Virgin Islands (+7), while the largest decreases were in New York (-8,091), Michigan (-6,941), California (-5,326), Missouri (-3,610), and Kentucky (-3,301).
Eye on the Week Ahead
There isn’t much in terms of economic reports available this week. Of some interest is the S&P Global’s survey of service providers for July. The services sector has shown marked resilience during the period of restrictive economic policy and has steadily expanded.
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%.
The stock market fared quite nicely during the Fourth of July week. Each of the benchmark indexes listed here posted gains, with the Nasdaq and the S&P 500 reaching record highs a few times during the week. Only the small caps of the Russell 2000 slid lower. The June jobs report (see below) gave investors encouragement that the Fed may be inclined to cut interest rates as early as September. Information technology, consumer discretionary, and communication services outperformed among the market sectors, while energy and health care lagged. Ten-year Treasury yields dipped 7.0 basis points. Crude oil prices advanced as tensions in the Middle East escalated. Gas prices increased, while some expect prices at the pump to continue to rise.
Wall Street opened the Fourth of July week with a bang. The Nasdaq gained 0.8% largely due to a strong performance from megacaps. The S&P 500 and the Global Dow rose 0.3%, while the Dow ticked up 0.1%. The small caps of the Russell 2000 fell 0.9% following its annual reconstitution, when breakpoints between large, mid, and small caps are redefined to make certain that market changes from the preceding year are reflected accurately. This annual event often leads to one of the highest-volume trading days as investors adjust their holdings based on the updates. Ten-year Treasury yields spiked higher, climbing 13.6 basis points to close at 4.47%. Crude oil prices also advanced, settling at about $83.46 per barrel after gaining $1.92. The dollar and gold prices changed marginally.
Stocks climbed higher last Tuesday as investors took encouragement from Fed Chair Jerome Powell’s comments, which indicated that significant progress has been made in bringing down inflation. However, Powell said modest economic expansion, coupled with a healthy labor market, has allowed the Fed to be patient in deciding about the next steps in its monetary policy. By the close of trading, the Nasdaq (0.8%) and the S&P 500 (0.6%) notched new record highs. The Dow rose 0.4%, the Global Dow advanced 0.3%, and the Russell 2000 gained 0.2%. Yields on 10-year Treasuries fell 4.3 basis points to settle at 4.43%. Crude oil prices ticked down to $83.03 per barrel. The dollar declined 0.2%, while gold prices were flat.
The Dow (-0.1%) was the only benchmark index listed here to close in the red last Wednesday. The Nasdaq (0.9%) and the S&P 500 (0.5%) reached record highs for the second straight day. The Global Dow (0.6%) and the small caps of the Russell 2000 (0.1%) also closed higher. Ten-year Treasury yields settled at 4.35%. Crude oil prices rose to $83.88 per barrel. The dollar edged lower, while gold prices rose 1.5%.
Stocks closed out the holiday-shortened week with mixed results. The Nasdaq (0.9%) and the S&P 500 (0.5%) closed the day at record highs, while the Dow advanced 0.2%. The Russell 2000 (-0.4%) and the Global Dow (-0.1%) closed the day lower. Ten-year Treasury yields fell 8.3 basis points, settling at 4.27%. Crude oil prices declined $0.63 to about $83.25 per barrel. The dollar fell for the fourth straight session, while gold prices advanced 1.2%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 7/5
Weekly Change
YTD Change
DJIA
37,689.54
39,118.86
39,375.87
0.66%
4.47%
Nasdaq
15,011.35
17,732.60
18,352.76
3.50%
22.26%
S&P 500
4,769.83
5,460.48
5,567.19
1.95%
16.72%
Russell 2000
2,027.07
2,047.69
2,026.73
-1.02%
-0.02%
Global Dow
4,355.28
4,677.14
4,755.64
1.68%
9.19%
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%
4.27%
-7 bps
41 bps
US Dollar-DXY
101.39
105.88
104.87
-0.95%
3.43%
Crude Oil-CL=F
$71.30
$81.51
$83.25
2.13%
16.76%
Gold-GC=F
$2,072.50
$2,335.00
$2,397.40
2.67%
15.68%
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
Total employment rose by 206,000 in June, slightly under the average monthly gain of 220,000 over the prior 12 months. Last month, job gains occurred in government, health care, social assistance, and construction. Total employment proved not to be quite as robust as originally thought. The change in total employment for April was revised down by 57,000, and the change for May was revised down by 54,000. With these revisions, employment in April and May combined was 111,000 lower than previously reported. In June, the unemployment rate was 4.1%, an increase of 0.1 percentage point from the May rate. The number of unemployed rose by 162,000 in June to 6.8 million. These measures are higher than a year earlier when the jobless rate was 3.6%, and the number of unemployed was 6.0 million. The number of long-term unemployed (those jobless for 27 weeks or more) rose by 166,000 to 1.5 million in June. This measure is up from 1.1 million a year earlier. The long-term unemployed accounted for 22.2% of all unemployed people in June. The labor force participation rate rose 0.1 percentage point to 62.6%. The employment-population ratio was unchanged in June at 60.1%. In June, average hourly earnings increased by $0.10, or 0.3%, to $35.00. Over the past 12 months, average hourly earnings have increased by 3.9%. The average workweek in June was 34.3 hours for the third consecutive month.
The S&P Global US Manufacturing Purchasing Managers’ Index™ ticked up to a three-month high of 51.6 in June. New orders rose for the second straight month, prompting a rise in production. Survey respondents noted that employment increased at the fastest rate since September 2022. While producer costs continued to rise, the rate of input cost inflation eased in June, and selling prices rose at the slowest pace this year.
Business activity and new orders expanded in June, according to the S&P Global US Services PMI®. Activity in the services sector has risen in each of the past 17 months, with the latest expansion the most pronounced since April 2022. Survey respondents noted that the rising demand sparked an increase in workforce numbers for the first time in three months. Both input and output prices eased in June.
According to the latest Job Openings and Labor Turnover Summary, the number of job openings in May rose by 221,000 (8.1 million), the number of hires increased by 141,000 (5.8 million), and the number of total separations grew by 85,000 (5.4 million).
The goods and services trade deficit for May was $75.1 billion, up $0.6 billion from the April deficit, according to the latest report from the Bureau of Economic Analysis. May exports were $261.7 billion, $1.8 billion less than April exports. May imports were $336.7 billion, $1.2 billion less than April imports. 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%.
The national average retail price for regular gasoline was $3.479 per gallon on July 1, $0.041 per gallon above the prior week’s price but $0.048 per gallon less than a year ago. Also, as of July 1, the East Coast price rose $0.026 to $3.389 per gallon; the Midwest price increased $0.092 to $3.415 per gallon; the Gulf Coast price advanced $0.055 to $3.071 per gallon; the Rocky Mountain price increased $0.055 to $3.351 per gallon; and the West Coast price fell $0.032 to $4.236 per gallon.
For the week ended June 29, there were 238,000 new claims for unemployment insurance, an increase of 4,000 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 22 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended June 22 was 1,858,000, an increase of 26,000 from the previous week’s level, which was revised down by 7,000. This is the highest level for insured unemployment since November 27, 2021, when it was 1,878,000. States and territories with the highest insured unemployment rates for the week ended June 15 were New Jersey (2.2%), California (2.1%), Minnesota (2.0%), Puerto Rico (1.9%), Pennsylvania (1.7%), Rhode Island (1.7%), Washington (1.7%), Illinois (1.6%), Nevada (1.6%), Massachusetts (1.5%), and New York (1.5%). The largest increases in initial claims for unemployment insurance for the week ended June 22 were in New Jersey (+5,371), Massachusetts (+3,785), Connecticut (+1,243), Oregon (+968), and Rhode Island (+810), while the largest decreases were in Minnesota (-2,993), Texas (-2,495), Pennsylvania (-2,454), Illinois (-2,117), and California (-1,226).
Eye on the Week Ahead
Important inflation data is on tap for this week. The Consumer Price Index for June is out. May showed no increase in the CPI and a slight reduction in the 12-month figure. Also available this week is the Producer Price Index for June. May saw producer prices fall 0.2%.
The Markets (second quarter through June 28, 2024)
Wall Street got off to a slow start to begin the second quarter of 2024. Stocks lagged for much of April, rebounded in May, and were choppy in June. Investors spent the quarter watching economic data, trying to gauge whether the Federal Reserve might lower interest rates. In April, investors were discouraged by the unexpected rise in inflation, which dampened hopes of several interest rate decreases during the year. However, the latest economic data gave some indication that inflationary pressures may be scaling back. The personal consumption expenditures (PCE) price index for May rose at its slowest pace since March 2021. Nevertheless, lowering price pressures has been a slow process and inflation could push higher again. In response, the Federal Reserve has remained cautious in its assessment of inflation going forward and will look for more concrete data confirming downward price pressures before loosening its restrictive monetary policy. Several indexes reached new records throughout the quarter. The S&P 500 and the Nasdaq closed out the quarter at new highs, marking the 32nd record close of the year for the S&P 500 and the 21st for the Nasdaq. Among the market sectors, information technology outperformed, gaining 14.5% in the quarter, followed by communication services, and utilities. Materials, industrials, and real estate lagged. Rising bond yields weighed on prices, with the yield on 10-year Treasuries closing the quarter up nearly 15.0 basis points from the end of the first quarter, while the yield on the 2-year note ended the quarter about where it began. Corporate earnings got off to a good start for the year, with first-quarter earnings exceeding analyst expectations for the fifth consecutive quarter. Roughly 78.3% of S&P 500 companies reported earnings that beat expectations, as companies in consumer staples, financials, health care, real estate, and communication services bested their prior four-quarter average.
Gold rose more than 4.0% in the second quarter and nearly 13.0% 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 $2,450 per ounce in May. Crude oil prices dipped about $1.75 per barrel by the end of the first quarter. Prices on March 28 were $83.17 per barrel, dropping as low as $74.07 per barrel in early June, and settling at about $81.51 per barrel on the last business day of June. However, fears that the unrest in the Middle East will escalate, coupled with a cut in production, could drive prices higher through the remainder of the year. The retail price for regular gasoline was $3.438 per gallon on June 24, $0.139 below the price a month earlier and $0.085 less than the price March 25 estimate. Regular retail gas prices decreased $0.113 from a year ago. The U.S. dollar ended the quarter trading at its highest price since November 2023. Home mortgage rates began the quarter at about 6.82% for the 30-year fixed rate, according to Freddie Mac. Rates jumped as high as 7.03% at the end of May, ultimately settling at 6.86% on June 27.
April saw stocks get off to a slow start as progress toward reducing inflation took a step back, heightening concerns that interest rates would remain higher for longer. Each of the benchmark indexes listed here ended the month in the red, with the S&P 500 suffering its first monthly loss in the last six months. Small-cap stocks were particularly hit hard, dragging the Russell 2000 down by over 7.0%, which caused that index to fall into negative territory since the beginning of the year. Ten of the 11 sectors of the S&P 500 recorded losses, with the exception of utilities, which eked out a marginal gain. The bond market also struggled in April, with the yield on 10-year Treasuries climbing 48 basis points, reaching its highest level since October. First-quarter earnings season kicked off in April and saw reports come in modestly above expectations. Investors paid particular attention to economic reports and the response from the Federal Reserve. Reports released in April revealed 315,000 new jobs added in March. The PCE price index rose 0.5% in March, while the Consumer Price Index (CPI) climbed 0.4%. Industrial production edged higher. The housing sector produced mixed results in March, with sales of existing homes falling, while new home sales advanced.
In May, equity markets rebounded from a moribund April, with each of the benchmark indexes listed here making notable gains. The Dow, the Nasdaq, and the S&P 500 reached all-time highs during the month. Tech shares outperformed, while energy declined with falling crude oil prices. Over half of the S&P 500’s nearly 5.0% May gain was attributed to growth of four mega tech stocks. Investors also saw economic signs that might support an interest rate reduction. Job growth was weaker than expected. First-quarter GDP lagged to 1.3% growth. April’s PCE price index (excluding food and energy prices) advanced 2.8%. April’s CPI rose 0.3%, while retail sales were weaker than expected. Corporate earnings for the first quarter were favorable, as 78% of reporting S&P 500 companies beat earnings per share (EPS) estimates. Companies in the communications services sector had a growth rate of 34%, beating the other ten market sectors. Prices at the pump fell in May from April. The dollar fell nearly 1.6%, the first monthly decline in the last five months.
June proved to be a month full of ups and downs for stocks. The month began with each of the benchmark indexes listed here posting gains (with the exception of the Russell 2000). A robust jobs report helped alleviate concerns about an economic slowdown, although it bolstered the Fed’s hawkish stance. Through the middle of June, tech stocks, particularly AI holdings, carried the market. Unfortunately, the rally came to a halt at the end of the month. Nevertheless, stocks closed June higher than it began, with several of the benchmark indexes closing in the black, with the exception of the Russell 2000 and the Global Dow, which closed the month lower. Most of the market sectors outperformed, with information technology and consumer discretionary leading the way. Utilities, materials, and energy were the only sectors to close in the red.
Stock Market Indexes
Market/Index
2023 Close
As of June 28
Monthly Change
Quarterly Change
YTD Change
DJIA
37,689.54
39,118.86
1.12%
-1.73%
3.79%
Nasdaq
15,011.35
17,732.60
5.96%
8.26%
18.13%
S&P 500
4,769.83
5,460.48
3.47%
3.92%
14.48%
Russell 2000
2,027.07
2,047.69
-1.08%
-3.62%
1.02%
Global Dow
4,355.28
4,677.14
-0.76%
0.02%
7.39%
fed. funds target rate
5.25%-5.50%
5.25%-5.50%
0 bps
0 bps
0 bps
10-year Treasuries
3.86%
4.34%
-17 bps
14 bps
48 bps
US Dollar-DXY
101.39
105.88
1.21%
1.27%
4.43%
Crude Oil-CL=F
$71.30
$81.51
5.54%
-1.87%
14.32%
Gold-GC=F
$2,072.50
$2,335.00
-0.57%
4.02%
12.67%
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 272,000 in May, following a net downward revision over the previous two months. The May jobs increase was well above expectations. Employment trended up in health care, government, leisure and hospitality, and professional, scientific, and technical services. In May, 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 May, the number of long-term unemployed (those jobless for 27 weeks or more), at 1.4 million, accounted for 20.7% of all unemployed people. The labor force participation rate, at 62.5%, was 0.2 percentage point below the prior month’s estimate, while the employment-population ratio dipped 0.1 percentage point to 60.1% in May. In May, average hourly earnings increased by $0.14, or 0.4%, to $34.91. Since May 2023, average hourly earnings rose by 4.1%, which is up from the April figure of 3.9%. The average workweek was unchanged at 34.3 hours in May.
There were 233,000 initial claims for unemployment insurance for the week ended June 22, 2024. During the same period, the total number of workers receiving unemployment insurance was 1,839,000. A year ago, there were 238,000 initial claims, while the total number of workers receiving unemployment insurance was 1,750,000.
FOMC/interest rates: The Federal Open Market Committee met twice in the second quarter, in May and in June. Following each of those meetings, the Committee kept interest rates at their current levels. Each time, the FOMC noted that the economy in general, and the labor market in particular, had remained steady, while inflation stayed well above the Fed’s target rate of 2.0%. Overall, the FOMC maintained its hawkish stance toward lowering interest rates, with the possibility of one rate cut before the end of the year.
GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 1.4% in the first quarter of 2024, according to the third and final estimate from the Bureau of Economic Analysis. GDP increased 3.4% in the fourth quarter. Personal consumption expenditures rose 1.5% in the first quarter compared to a 3.3% increase in the previous quarter. Consumer spending on goods dipped 2.3%, while spending on services rose 3.3%. Gross domestic investment rose 4.4% in the first quarter, well above the 0.7% increase in the fourth quarter. Nonresidential fixed investment advanced 4.4% in the first quarter (3.7% in the fourth quarter), while residential fixed investment increased 16.0% in the first quarter compared to a 2.8% increase in the fourth quarter. Exports inched up 1.6%, while imports, which are a negative in the calculation of GDP, increased 6.1%. Consumer prices increased 3.4% in the first quarter, compared with an increase of 1.8% in the previous quarter. Excluding food and energy prices, the PCE price index increased 3.7%, compared with an increase of 2.0% in the fourth quarter.
The federal budget deficit in May was $347.0 billion, well above the May 2023 deficit of the $240.3 billion. April saw a budget surplus of $209.5 billion. In May, government receipts totaled $323.6 billion, while government outlays were $670.8 billion. Through the first eight months of fiscal year 2024, the total deficit sits at $1,202.3 trillion, which is roughly $37.0 billion higher than the deficit through the first eight months of the previous fiscal year.
Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income rose 0.5% in May (0.3% in April) and disposable personal income also increased 0.5%, up from 0.3% in April. The PCE price index was unchanged in May after rising 0.3% in each of the prior three months. The PCE price index excluding food and energy (core prices), ticked up 0.1% in May. Consumer prices rose 2.6% since May 2023, down 0.1 percentage point compared to the 12 months ended in April. Core prices increased 2.6% over the same period, 0.2 percentage points lower than the 12 months ended in April. Consumer spending rose 0.2% in May after advancing 0.1% in April.
The Consumer Price Index was unchanged in May after rising 0.3% in April. Over the 12 months ended in May, the CPI rose 3.3%, down 0.1 percentage point from the period ended in April. Excluding food and energy, the CPI rose 0.2% in May, (0.3% in April), and 3.4% from May 2023. Increases in prices for shelter (0.4%) and food (-0.1%), particularly food away from home (0.4%), were offset by a decrease in prices for energy (-0.2%) and gasoline (-3.6%). In addition to advances in prices for shelter and food, May saw increases in prices for medical care, used cars and trucks, and education, while prices for airline fares, new vehicles, communication, recreation, and apparel were among those that declined.
Prices that producers received for goods and services fell 0.2% in May after rising 0.5% in April. The May decline was attributable to a decrease in prices for goods (-0.8%), while prices for services were unchanged from the prior month. Nearly 60% of the May decrease in prices for goods can be traced to a 7.1% decline in prices for gasoline. Producer prices increased 2.2% for the 12 months ended in May, unchanged from the increase over the 12 months ended in April. Producer prices less foods, energy, and trade services were flat in May after increasing 0.5% in April. For the 12 months ended in May, prices less foods, energy, and trade services moved up 3.2%, the same increase as estimated for the 12 months ended in April.
Housing: Sales of existing homes fell 0.7% in May and 2.8% over the last 12 months. According to the National Association of Realtors® (NAR), existing home sales have stagnated due to low inventory, rising home prices, and high interest rates. The median existing-home price was $419,300 in May, the highest price ever recorded. The May price was 3.1% above the April price of $406,600 and 5.8% higher than the May 2023 price of $396,500. Unsold inventory of existing homes in May represented a 3.7-month supply at the current sales pace, up slightly from 3.5 months in April. Sales of existing single-family homes decreased 0.8% in May and 2.1% from the prior year. The median existing single-family home price was $424,500 in May, up from $411,100 in April and well above the May 2023 estimate of $401,500. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.87% as of June 20, down from 6.95% the previous week but up from 6.67% one year ago.
New single-family home sales also declined in May, falling 11.3% below the April pace and 16.5% under the May 2023 rate. The median sales price of new single-family houses sold in April was $417,400 ($417,900 in April). The May average sales price was $520,000 ($503,700 in April). The inventory of new single-family homes for sale in May represented a supply of 9.3 months at the current sales pace, up from 9.1 months in April.
Manufacturing: Industrial production rose 0.9% in May, after being flat in April. Manufacturing output also increased 0.9% in May after declining 0.4% in April. Mining increased 0.3% in May, while utilities advanced 1.6%. For the 12 months ended in May, total industrial production advanced 0.4% from its year-earlier level. Over the same period, manufacturing increased 0.1%, mining decreased 0.4%, while utilities increased 3.9%.
New orders for durable goods rose 0.1% in May following a downwardly revised 0.2% April increase. Excluding transportation, new orders decreased 0.1% in May. Excluding defense, new orders fell 0.2%. New orders for transportation equipment advanced 0.6% in May, contributing to the overall increase in new orders. New orders for nondefense capital goods in May decreased 2.8%, while new orders for defense capital goods increased 22.6%.
Imports and exports: U.S. import prices decreased 0.4% in May following a 0.9% advance in the previous month. The May decrease was the first monthly decline since December 2023. Import prices advanced 1.1% over the last 12 months, matching the April 12-month increase. The May and April 12-month advances were the largest 12 month increases since December 2022. Import fuel prices fell 2.0% in May after increasing 4.1% in April. Despite the May decrease, import fuel prices rose 7.9% over the past 12 months, the largest 12-month advance since December 2022. Import prices excluding fuel ticked down 0.3% in May, following a 0.7% rise the previous month. Export prices declined 0.6% in May after advancing 0.6% in April. The May decrease in exports was the first monthly decline since December 2023. Lower nonagricultural prices in May more than offset higher agricultural prices. Despite the drop in May, prices for exports rose 0.6% from May 2023 to May 2024, the first 12-month advance since January 2023.
The international trade in goods deficit was $100.6 billion in May, up $2.7 billion, or 2.7%, from April. Exports of goods were $166.7 billion in May, $4.6 billion, or 2.7%, less than in April. Imports of goods were $267.3 billion in May, $2.0 billion, or 0.7%, under the April estimate. Since April 2023, exports increased 4.2%, while imports increased 3.2%.
The latest information on international trade in goods and services, released June 6, is for April and revealed that the goods and services trade deficit was $74.6 billion, up $2.1 billion, or 8.7%, from the March deficit. April exports were $263.7 billion, 0.8% less than March exports. April imports were $338.2 billion, 2.4% more than March imports. Year to date, the goods and services deficit increased $5.5 billion, or 2.0%, from the same period in 2023. Exports increased $32.2 billion, or 3.2%. Imports increased $37.8 billion, or 2.9%.
International markets: The United Kingdom’s GDP expanded 0.7% in the first quarter, a little higher than expectations. It was the largest expansion in over two years, which signals an end to the economic recession that began last year. Canada’s GDP rose 0.3% in April but is expected to slow to 0.1% growth in May. Eurozone inflation rose 0.2% in May and 2.6% over the last 12 months. Core prices advanced 2.9% for the year, 0.2 percentage points above the period ended in April. In China, retail sales rose 3.7%, ahead of expectations, while industrial production inched up 0.3%. For June, the STOXX Europe 600 Index fell 1.1%; the United Kingdom’s FTSE lost 1.1%; Japan’s Nikkei 225 Index advanced 2.9%; and China’s Shanghai Composite Index fell 3.9%.
Consumer confidence: Consumer confidence dipped in June to 100.4, down from 101.3 in May, according to the Conference Board Consumer Confidence Index®. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, increased to 141.5 in June, up from 140.8 in the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, fell to 73.0 in June, down from 74.9 in May. The Expectations Index has been below 80 (the threshold which usually signals a recession ahead) for five consecutive months.
Eye on the Quarter Ahead
Investors will likely focus much of their attention on the Federal Reserve during the third quarter of 2024. While the Fed has maintained interest rates at their current level for several months, they suggested that one decrease could be in the offing this year. Stock performance was choppy during the second quarter, with some indexes reaching record highs, only to fall back. Traders will look to the third quarter for more stability and steady gains in the market.
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