Wall Street marked another week of gains, with each of the benchmark indexes climbing higher. The Dow and the S&P 500 attained new records, while the NASDAQ rode a spurt in tech and communication shares. Nine of the 11 market sectors closed the week higher, led by utilities, financials, and real estate. Health care and energy declined. Gold prices also reached new record highs, driven by global demand for safer assets and expectations of further interest rate cuts by major central banks. Crude oil prices declined, marking the largest weekly drop since the beginning of September. Weaker demand and slowing economic growth in China drove the downturn in crude oil prices.
The Dow and the S&P 500 achieved fresh highs last Monday as corporate earnings season kicked into high gear. The NASDAQ climbed 0.9% behind a strong performance by tech shares. The S&P 500 rose 0.8%, the Russell 2000 added 0.6%, the Dow advanced 0.5%, and the Global Dow gained 0.4%. Crude oil prices fell 2.1% to $73.98 per barrel as OPEC+ cut the outlook for demand. The dollar rose 0.3%, while gold prices fell 0.2%. The bond market was closed for the holiday.
Last Monday’s rally didn’t carry over to Tuesday. Each of the benchmark indexes listed here closed sharply lower as weak corporate earnings from a large chipmaker led to a broad selloff in tech shares. The NASDAQ lost 1.0%, while the Dow and the S&P 500 fell 0.8%. The Global Dow dipped 0.6%. The small caps of the Russell 2000 ticked up 0.1%. Ten-year Treasury yields closed at 4.03%, a 0.6-basis-point decline. Crude oil prices dropped 4.0% to $70.90 per barrel. The dollar was flat, while gold prices rose 0.4%.
Stocks closed higher last Wednesday, with the Dow reaching another record high. The Russell 2000 gained 1.6%, followed by the Dow (0.8%), the S&P 500 (0.5%), the NASDAQ (0.3%), and the Global Dow (0.1%). Utilities and financials led the market sectors, while communication services and consumer staples declined. Yields on 10-year Treasuries slipped to 4.01%. Crude oil prices decreased for the third straight day, closing at $70.49 per barrel. The dollar and gold prices increased.
Last Thursday saw stocks close with mixed results. The Dow rose 0.4%, notching another record, the Global Dow inched up 0.1%, and the NASDAQ gained less than 0.1%. The Russell 2000 lost 0.3%, and the S&P 500 closed marginally lower. Ten-year Treasury yields climbed 0.8 basis points to 4.09%. Crude oil prices ended a downward trend, gaining 0.5% to settle at $70.76 per barrel. The dollar gained 0.2%, and gold prices rose 0.6%.
Stocks ended last Friday’s session mostly higher as the S&P 500 (0.4%) and the Dow (0.1%) recorded new highs. The tech-heavy NASDAQ gained 0.6%, and the Global Dow rose 0.4%. The Russell 2000 fell 0.2%. Positive earnings data and a surge in Megacaps helped drive the market higher. Yields on 10-year Treasuries slipped to 4.07%. Crude oil gave back the previous day’s gains after falling 1.9%. The dollar declined 0.3%, while gold prices rose 1.1%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 10/18
Weekly Change
YTD Change
DJIA
37,689.54
42,863.86
43,275.91
0.96%
14.82%
NASDAQ
15,011.35
18,342.94
18,489.55
0.80%
23.17%
S&P 500
4,769.83
5,815.03
5,864.67
0.85%
22.95%
Russell 2000
2,027.07
2,234.41
2,276.09
1.87%
12.28%
Global Dow
4,355.28
5,022.79
5,043.43
0.41%
15.80%
fed. funds target rate
5.25%-5.50%
4.75%-5.00%
4.75%-5.00%
0 bps
-50 bps
10-year Treasuries
3.86%
4.09%
4.07%
-2 bps
21 bps
US Dollar-DXY
101.39
102.93
103.46
0.51%
2.04%
Crude Oil-CL=F
$71.30
$75.66
$69.35
-8.34%
-2.73%
Gold-GC=F
$2,072.50
$2,672.40
$2,736.90
2.41%
32.06%
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 September, retail and food services sales rose 0.4% from the previous month and increased 1.7% from a year earlier. Retail trade sales climbed 0.3% in September and 1.4% from last year. Nonstore (online) retail sales advanced 0.4% last month and 7.1% from September 2023. Gasoline station sales fell 1.6% in September and were down 10.7% for the year.
Industrial production decreased 0.3% in September after advancing 0.3% in August. A strike at a major producer of civilian aircraft and the effect of two hurricanes impacted industrial production in September. Manufacturing output fell 0.4% last month, and mining dropped 0.6%. Utilities gained 0.7%. Total industrial production in September was 0.6% below its year-earlier level.
Prices for U.S. imports declined 0.4% in September following a 0.2% decrease the previous month, according to the U.S. Bureau of Labor Statistics. Lower fuel prices in September more than offset higher nonfuel prices. U.S. export prices fell 0.7% in September, after declining 0.9% in August. Import prices edged down 0.1% over the past year, the first 12-month drop since February 2024. Export prices declined 2.1% over the past year, the largest 12-month decrease since January 2024.
The number of issued building permits declined 2.9% in September and was 5.7% below the September 2023 rate. Single-family authorizations in September were 0.3% above the revised August figure. Privately-owned housing starts in September were 0.5% below the revised August estimate and were 0.7% below the September 2023 rate. Single-family housing starts in September were 2.7% above the revised August figure. Privately-owned housing completions in September were 5.7% below the revised August estimate but 14.6% above the September 2023 rate. Single-family housing completions in September were 2.7% below the revised August rate.
The national average retail price for regular gasoline was $3.171 per gallon on October 14, $0.035 per gallon above the prior week’s price but $0.405 per gallon less than a year ago. Also, as of October 14, the East Coast price rose $0.033 to $3.042 per gallon; the Midwest price increased $0.064 to $3.100 per gallon; the Gulf Coast price inched up $0.010 to $2.735 per gallon; the Rocky Mountain price dipped $0.013 to $3.258 per gallon; and the West Coast price increased $0.020 to $4.047 per gallon.
For the week ended October 12, there were 241,000 new claims for unemployment insurance, a decrease of 19,000 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 October 5 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 5 was 1,867,000, an increase of 9,000 from the previous week’s level, which was revised down by 3,000. States and territories with the highest insured unemployment rates for the week ended September 28 were New Jersey (2.2%), California (2.0%), Puerto Rico (1.8%), Rhode Island (1.8%), Washington (1.8%), Nevada (1.6%), Massachusetts (1.5%), New York (1.5%), Illinois (1.4%), Connecticut (1.3%), and Pennsylvania (1.3%). The largest increases in initial claims for unemployment insurance for the week ended October 5 were in Michigan (+9,389), North Carolina (+8,714), Ohio (+4,648), California (+4,068), and Florida (+4,021), while the largest decreases were in Wyoming (-24), Idaho (-21), Louisiana (-13), Massachusetts (-12), and Alaska (-10).
Eye on the Week Ahead
The September figures for sales of existing and new homes are available this week. Both markets saw a slip in sales in August. However, with mortgage rates slowly decreasing and inventory increasing, sales should pick up some steam throughout the remainder of the year.
Investors were confronted with plenty of market-moving information last week as they waded through negative developments and some positive signs. Growing tensions in the Middle East and a slowdown in the manufacturing sector (see below) were causes for concern, while a better-than-expected jobs report (see below) helped alleviate some of those worries, at least for a time. The S&P 500, the NASDAQ, and the Dow ended a very volatile week on the plus side, while the Russell 2000 and the Global Dow closed the week lower. Among the market sectors, energy surged by more than 8.5%, while communication services, financials, and industrials also closed higher. The remaining sectors declined, led by real estate and materials. Ten-year Treasury yields surged to their highest level in nearly two months as the robust labor report cooled expectations that the Federal Reserve needed to aggressively cut interest rates.
The stock market spent most of last Monday in negative territory, facing selling pressures, only to rally at the close of the session. The S&P 500 and the NASDAQ each gained 0.4%, the Russell 2000 added 0.2%, while the Dow was flat. The Global Dow declined 0.5%. Ten-year Treasury yields rose 5.3 basis points to settle at 3.80%. Crude oil prices inched up 0.1% to $68.24 per barrel. The dollar and gold prices fell marginally.
Stocks slid lower last Tuesday amid rising tensions in the Middle East. Investors also had to consider a slowdown in manufacturing activity (see below), although job openings rose unexpectedly in August, evidencing that the lag in the labor market may not be quite so pronounced. All of the benchmark indexes listed here lost value, led by the Russell 2000 and the NASDAQ, each of which declined 1.5%. The S&P 500 fell 0.9%, the Global Dow dipped 0.5%, and the Dow slid 0.4%. Crude oil prices rose 3.6%, reaching $70.64 per barrel. Ten-year Treasury yields fell 5.9 basis points to 3.74%. The dollar rose 0.4% against a basket of currencies, while gold prices advanced 0.8%.
The benchmark indexes listed here closed mostly higher last Wednesday, with the exception of the Russell 2000 and the Global Dow, each of which slipped 0.1% lower. The S&P 500, the Dow, and the NASDAQ inched up by about 0.1%. Ten-year Treasury yields rose to 3.78%. Crude oil prices continued to advance, settling at $70.90 per barrel. The dollar gained 0.4%, while gold prices fell 0.4%.
Stocks closed lower last Thursday as escalating tensions in the Middle East and the dock workers’ strike were concerns for investors. The small caps of the Russell 2000 led the declines, falling 0.7%, followed by the Global Dow (-0.6%), the Dow (-0.4%), and the S&P 500 (-0.2%). The NASDAQ dipped less than 0.1%. Crude oil prices vaulted 5.3%, reaching $73.82 per barrel. Ten-year Treasury yields rose 6.5 basis points to 3.85%. The dollar and gold prices each rose 0.3%.
Last Friday saw stocks move higher on the heels of a strong jobs report, which quelled, at least temporarily, investors’ concerns over Middle East tensions. The Russell 2000 gained 1.5%, followed by the NASDAQ (1.2%), the S&P 500 (0.9%), and the Dow (0.8%), which reached another record high. The Global Dow rose 0.6%. Yields on 10-year Treasuries vaulted 13.1 basis points to close at 3.98% as bond prices declined. Crude oil prices gained 1.0%, the dollar advanced 0.5%, while gold prices slid 0.3%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 10/4
Weekly Change
YTD Change
DJIA
37,689.54
42,313.00
42,352.75
0.09%
12.37%
NASDAQ
15,011.35
18,119.59
18,137.85
0.10%
20.83%
S&P 500
4,769.83
5,738.17
5,751.07
0.22%
20.57%
Russell 2000
2,027.07
2,224.70
2,212.80
-0.53%
9.16%
Global Dow
4,355.28
5,064.45
5,006.95
-1.14%
14.96%
fed. funds target rate
5.25%-5.50%
4.75%-5.00%
4.75%-5.00%
0 bps
-50 bps
10-year Treasuries
3.86%
3.74%
3.98%
24 bps
12 bps
US Dollar-DXY
101.39
100.39
102.48
2.08%
1.08%
Crude Oil-CL=F
$71.30
$68.57
$74.59
8.78%
4.61%
Gold-GC=F
$2,072.50
$2,674.90
$2,671.10
-0.14%
28.88%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
The employment sector showed major signs of life in September. Total employment expanded by 254,000 last month, exceeding expectations and well above the 12-month average of 203,000. The September increase follows upward revisions to both the July and August estimates, which combined were 72,000 higher than previously reported. The unemployment rate, at 4.1%, ticked down 0.1 percentage point from August, while the number of unemployed decreased by 281,000 to 6.8 million. The labor force participation rate was unchanged at 62.7%, while the employment-population ratio rose 0.2 percentage point to 60.2%. The number of unemployed for at least 27 weeks increased by 97,000 to 1.6 million. In September, the long-term unemployed accounted for 23.7% of all unemployed people. In September, average hourly earnings increased by $0.13, or 0.4%, to $35.36. Over the past 12 months, average hourly earnings have increased by 4.0%. The average workweek edged down by 0.1 hour to 34.2 hours in September.
According to the S&P Global survey of purchasing managers, the manufacturing sector moved deeper into contraction in September. The S&P Global US Manufacturing Purchasing Managers’ Index™ remained below the 50.0 no-change mark in September, dipping to 47.3 from 47.9 in August. The manufacturing sector regressed for three consecutive months, with September’s reading the most pronounced decline since June 2023. Central to the drop in manufacturing was a sharp fall in new orders amid a slowdown in the overall economy, and uncertainty around the upcoming presidential election.
While the manufacturing sector may be waning, the services sector is showing strength. A reduction in interest rates helped increase new orders and boost services activity in September, according to the latest S&P Global survey of purchasing managers. New business continued to rise solidly, leading to a build-up of unfinished work as companies were cautious with regards to hiring in the face of strong cost pressures. In fact, input prices rose at the joint-fastest pace in a year, with selling price inflation also accelerating. The S&P Global US Services PMI® Business Activity Index posted 55.2 in September, down from 55.7 in August but still a marked monthly increase in the services sector, which has now increased in each of the last 20 months.
The number of job openings increased in August, according to the latest data from the Job Openings and Labor Turnover Summary. At roughly 8.0 million, job openings increased by 329,000. The number of hires was essentially unchanged at 5.3 million, while total separations, at 5.0 million, declined by 317,000.
The national average retail price for regular gasoline was $3.179 per gallon on September 30, $0.006 per gallon below the prior week’s price and $0.619 per gallon less than a year ago. Also, as of September 30, the East Coast price rose $0.008 to $3.060 per gallon; the Midwest price increased $0.028 to $3.105 per gallon; the Gulf Coast price fell $0.038 to $2.695 per gallon; the Rocky Mountain price dipped $0.019 to $3.415 per gallon; and the West Coast price decreased $0.069 to $4.042 per gallon.
For the week ended September 28, there were 225,000 new claims for unemployment insurance, an increase of 6,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 21 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 21 was 1,826,000, a decrease of 1,000 from the previous week’s level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended September 14 were New Jersey (2.3%), California (2.0%), Puerto Rico (1.9%), Rhode Island (1.8%), Washington (1.7%), Nevada (1.6%), Illinois (1.5%), Massachusetts (1.5%), New York (1.5%), and Pennsylvania (1.4%). The largest increases in initial claims for unemployment insurance for the week ended September 21 were in Virginia (+688), Washington (+596), Ohio (+584), Louisiana (+382), and North Carolina (+236), while the largest decreases were in New York (-1,510), Texas (-1,450), South Carolina (-641), Wisconsin (-532), and Massachusetts (-531).
Eye on the Week Ahead
The latest inflation data is available this week, with the release of the Consumer Price Index for September. The CPI inched up 0.2% in August and 2.5% since August 2023. Most forecasters predict September’s data should be in line with the data from August.
The Markets (third quarter through September 30, 2024)
Wall Street got off to a good start to begin the third quarter of 2024 and continued to rally for much of the quarter. Investors spent the quarter watching inflation and economic data, trying to gauge whether the Federal Reserve might lower interest rates. Each month of the quarter provided solid evidence that inflationary pressures had been curbed. Both the personal consumption expenditures (PCE) price index and the Consumer Price Index (CPI) declined over the last three months, with the 12-month rate for the CPI ending the quarter at 2.5%, and the PCE price index closing the quarter at 2.2%. In response, the Federal Reserve cut the federal funds target rate range by 50.0 basis points, marking the first rate reduction since March 2020 in the midst of the COVDI-19 pandemic. Several indexes reached new records throughout the quarter. The S&P 500 is off to its best nine-month start since 1997, while the Dow and the NASDAQ also hit new highs in the third quarter. Among the market sectors, only energy failed to close the quarter higher. The remaining 10 sectors recorded notable gains, led by utilities (19.1%), real estate (17.1%), industrials (12.6%), and materials (11.1%). Rising bond prices weighed on yields, with the yield on 10-year Treasuries closing lower in each month of the quarter. The yield on the 2-year note ended the quarter at 3.65%, a decrease of 84.0 basis points from the beginning of the quarter. Corporate earnings enjoyed a solid quarter, with 80.0% of S&P 500 companies reporting actual earnings per share (EPS) above the five-year average of 77.0%. The S&P 500 further reported growth in earnings of 11.3%, marking the highest year-over-year growth since the fourth quarter of 2021.
Gold rose nearly 14.0% in the third quarter and nearly 28.0% in 2024 as anticipated interest rate cuts by central banks supported trading precious metals. In addition, higher demand for gold by several Asian central banks, particularly the People’s Bank of China, helped lift the price of gold, which reached a record high of $2,685.15 per ounce at the end of September. Crude oil prices fell about 16.0% in the third quarter as China’s economic struggles, rising supplies, weak demand, and escalating tensions in the Middle East took their toll. The retail price for regular gasoline was $3.185 per gallon on September 23, $0.128 below the price a month earlier and $0.253 less than the price at the end of the second quarter. Regular retail gas prices decreased $0.652 from a year ago. The U.S. dollar ended the quarter down nearly 5.0%. Home mortgage rates averaged 6.2% as of September 12, about 0.57% percent lower than the July 18 rate and down from 7.18% a year ago.
July proved to be an interesting month in the stock market as tech stocks, which had been the bellwether of the market for much of the year, dipped lower, replaced by small- and mid-cap stocks. While the Federal Reserve did not change the Fed funds rate in July, there was plenty of rhetoric supporting a rate cut as early as September. Economic data and Inflation indicators offered further support to a reduction in interest rates. The CPI registered 3.0% for the 12 months ended in June, a 0.3 percentage point decrease from the May yearly estimate. The PCE price index increased by 2.5% for the year ended in June, down from the May figure of 2.6%. Job gains slowed to 145,000 in June (revised), below the 12-month average of 215,000. Investors seemed to make moves based on the anticipated rate cuts. Lower interest rates tend to support smaller stocks, which are generally leveraged by borrowed funds. As such, the small caps of the Russell 2000 led the benchmark indexes listed here, gaining 10.1%, which accounted for most of its year-to-date 11.2% gain. The Dow rose 4.4% and the S&P 500 inched up 1.1%. The NASDAQ dipped 0.8%. Interest-sensitive market sectors also benefited from the projected rate cuts, with real estate, utilities, and financials leading the way, while information technology and communication services closed the month lower. Anticipated rate cuts also had an impact on bonds. The inverted yield curve between the 2-year and 10-year spread flattened, with yields on 10-year Treasuries falling 24.0 basis points. The retail price for regular gasoline at the end of July was $3.484 per gallon, down $0.273 from July 2023.
In August, Wall Street got off to a sluggish start only to rebound by the end of the month. Each of the benchmark indexes listed here posted gains (with the exception of the Russell 2000). The Global Dow gained 2.6%, followed by the S&P 500, which rose 2.3%. The Dow advanced 1.8% and the NASDAQ ticked up 0.7%. The Russell 2000, which could not maintain its strong July performance, fell 1.6%. While tech shares rebounded somewhat, the market broadened in general. Real estate and consumer staples led the market sectors, while consumer discretionary and energy declined. The Federal Reserve did not meet in August. However, Fed Chair Jerome Powell clearly intimated that there was strong consideration to lowering interest rates in September. With inflation indicators continuing to show a disinflationary trend, the focus shifted to employment, where job gains in July slipped to 89,000 (revised), while the unemployment rate settled at 4.2%. Bond prices rose again, dragging yields down 20.0 basis points to 3.90%. However, despite favorable stock market returns and a stabilized inflation rate, concerns over the shrinking labor market, a slowdown in industrial production, and the switch of presidential candidates, prompted some skepticism among investors.
September, which is historically a poor month for stocks, bucked that trend, with each of the benchmark indexes listed here closing the month higher. The Fed’s 50.0 basis-point interest rate cut, coupled with signs of resilience in the economy, helped raise investor confidence in the stock market. Each of the indexes listed here closed September higher, despite a slow start to the month. Consumer discretionary and utilities led the market sectors, which generally performed well in September, with the exception of health care, real estate, and energy, which lagged. Ten-year Treasury yields dipped lower. As aforementioned, the Fed cut interest rates by 50.0 basis points following the conclusion of its meeting on September 18. As a result, stocks moved generally higher, although several of the Fed officials tempered their comments concerning whether or when additional rate cuts may occur. Crude oil prices ended the month lower as weaker demand, coupled with rising surpluses, eclipsed concerns over escalating tensions in the Middle East. Gold prices advanced in September, enjoying several record highs along the way.
Stock Market Indexes
Market/Index
2023 Close
As of September 30
Monthly Change
Quarterly Change
YTD Change
DJIA
37,689.54
42,330.15
1.85%
8.21%
12.31%
NASDAQ
15,011.35
18,189.17
2.68%
2.57%
21.17%
S&P 500
4,769.83
5,762.48
2.02%
5.53%
20.81%
Russell 2000
2,027.07
2,229.97
0.56%
8.90%
10.01%
Global Dow
4,355.28
5,029.62
1.93%
7.54%
15.48%
fed. funds target rate
5.25%-5.50%
4.75%-5.00%
-50 bps
-50 bps
-50 bps
10-year Treasuries
3.86%
3.80%
-10 bps
-30 bps
-6 bps
US Dollar-DXY
101.39
100.75
-0.91%
-4.85%
-0.63%
Crude Oil-CL=F
$71.30
$68.35
-7.15%
-16.15%
-4.14%
Gold-GC=F
$2,072.50
$2,654.60
4.71%
13.69%
28.09%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Latest Economic Reports
Employment: Total employment increased by 142,000 in August, below the consensus of 160,000 and lower than the 12-month average gain of 202,000. The August estimate followed downward revisions in both June and July, which, combined, were 86,000 lower than previously reported. In August, job gains occurred in construction and health care. The unemployment rate for August ticked down 0.1 percentage point to 4.2% but was 0.4 percentage point above the rate from a year earlier (3.8%). The number of unemployed persons dipped by 48,000 to 7.1 million (6.3 million in August 2023). In August, the number of long-term unemployed (those jobless for 27 weeks or more) was unchanged at 1.5 million and accounted for 21.3% of all unemployed people. Both the labor force participation rate, at 62.7%, and the employment-population ratio, at 60.0%, did not change from the previous month. In August, average hourly earnings increased by $0.14, or 0.4%, to $35.21. Since August 2023, average hourly earnings rose by 3.8%. The average workweek edged up 0.1 hour to 34.3 hours.
There were 218,000 initial claims for unemployment insurance for the week ended September 21, 2024. During the same period, the total number of workers receiving unemployment insurance was 1,834,000. A year ago, there were 213,000 initial claims, while the total number of workers receiving unemployment insurance was 1,795,000.
FOMC/interest rates: The Federal Open Market Committee cut the federal funds target rate range by 50.0 basis points to 4.75%-5.00% following its September meeting. This was the first rate reduction in four years. The statement released by the Committee noted that it had achieved the greater confidence it sought on the path of disinflation, as the risks to the dual mandate of maximum employment and price stability were “roughly in balance.”
GDP/budget: According to the third and final estimate from the Bureau of Economic Analysis, the economy, as measured by gross domestic product, accelerated at an annualized rate of 3.0% in the third quarter of 2024. GDP increased 1.6% in the first quarter. Personal consumption expenditures rose 2.8% in the second quarter compared to a 1.5% increase in the previous quarter. Consumer spending on goods increased 3.0%, while spending on services rose 2.7%. Personal consumption expenditures (1.90%) contributed the most to overall economic growth. Gross domestic investment advanced 8.3% in the second quarter, well above the 3.6% increase in the first quarter. Nonresidential (business) fixed investment advanced 3.9% in the second quarter (4.4% in the first quarter), while residential fixed investment declined 2.8%, compared to a 13.7% increase in the first quarter. Exports climbed 1.0%, while imports, which are a negative in the calculation of GDP, increased 7.6%. Consumer prices, as measured by the personal consumption expenditures price index, increased 2.5%, compared with an increase of 3.4% in the first quarter. Excluding food and energy prices, the PCE price index increased 2.8%, compared with an increase of 3.7% in the prior quarter.
The federal budget deficit in August was $380.0 billion following July’s deficit of $244.0 billion. In August, government receipts totaled $307.0 billion, while government outlays were $687.0 billion. Through 11 months of fiscal year 2024, the total deficit sits at $1,900.0 trillion, which is roughly $400.0 billion more than the deficit through the first 11 months of the previous fiscal year.
Inflation/consumer spending: The PCE price index ticked up 0.1% in August after increasing 0.2% in July. Prices for goods decreased 0.2%, while prices for services increased 0.2%. Food prices increased 0.1%, while energy prices decreased 0.8%. Excluding food and energy, the PCE price index increased 0.1%. The 12-month PCE price index for August increased 2.2%. Prices for goods decreased 0.9%, while prices for services increased 3.7%. Food prices increased 1.1%, while energy prices decreased 5.0%. Excluding food and energy, the PCE price index increased 2.7% from one year ago. Also in August, both personal income and disposable (after-tax) personal income rose 0.2%. Personal consumption expenditures, a measure of consumer spending, increased 0.2%.
The Consumer Price Index rose 0.2% in August, the same increase as in July. Over the 12 months ended in August, the CPI rose 2.5%, down 0.4 percentage point from the 12-month period ended in July. This was the smallest 12-month increase since February 2021. Excluding food and energy, the CPI rose 0.3% in August, (0.2% in July), and 3.2% from August 2023. Shelter prices rose 0.5% in August and were the main factor in the overall increase. Since August 2023, shelter prices have risen 5.2%. Excluding shelter prices, the CPI was unchanged in August and up 1.1% from a year earlier. Energy prices fell 0.8% from July and 4.0% from August 2023. Prices for food rose 0.1% in August (2.1% for the year).
The Producer Price Index rose 0.2% in August after being unchanged in July. The increase was attributable to a 0.4% increase in prices for services. Prices for goods did not change. For the 12 months ended in August, producer prices advanced 1.7%, 0.5 percentage point below the rate for the 12-months ended in July.
Housing: Sales of existing homes declined 2.5% in August and 4.2% over the last 12 months. According to the National Association of Realtors® (NAR), the market for existing homes remained sluggish but lower mortgage rates and increased inventory should help spur sales moving forward. Unsold inventory of existing homes in August represented a 4.2-month supply at the current sales pace, up slightly from the July estimate. The median existing-home price was $416,700 in August, down from the July estimate of $421,400, but 3.1% above the August 2023 price of $404,200. Sales of existing single-family homes decreased 2.8% in August and were 3.3% under the August 2023 rate. The median existing single-family home price was $422,100 in August, down from $427,200 in July but well above the August 2023 estimate of $410,200.
New single-family home sales decreased in August, falling 4.7% below the July estimate but 9.8% higher than the August 2023 rate. The median sales price of new single-family houses sold in July was $420,600 ($429,000 in July). The August average sales price was $492,700 ($508,200 in July). The inventory of new single-family homes for sale in August represented a supply of 7.8 months at the current sales pace, up from 7.3 months in July.
Manufacturing: Industrial production increased 0.8% in August following a 0.9% in July. Manufacturing output rose 0.9% in August, rebounding from a 0.7% decline in July. The August increase was due, in part, to a recovery in motor vehicles and parts, which jumped nearly 10.0% after falling 9.0% in July. Manufacturing excluding motor vehicles and parts rose 0.3%. Mining output climbed 0.8%, while the index for utilities was unchanged. For the 12 months ended in August, total industrial production was unchanged from its year-earlier level. Over the same period, manufacturing increased 0.2%, mining increased 0.1%, while utilities fell 0.9%.
New orders for durable goods were unchanged in August from July. Excluding transportation, new orders increased 0.5%. Excluding defense, new orders decreased 0.2%. Electrical equipment, appliances, and components, up two of the last three months, drove the increase after advancing 1.9%. New orders for nondefense capital goods decreased 1.3% in August, while new orders for defense capital goods increased 5.3%.
Imports and exports: U.S. import prices ticked down 0.3% in August following increases of 0.1% in both July and June. The August decline in imports was the largest monthly drop since the index decreased 0.7% in December 2023. In spite of the August decline, U.S. import prices increased 0.8% over the past year. Import fuel prices decreased 3.0% in August after increasing 1.1% the previous month. The August drop was the largest one-month decline since the index fell 8.0% in December 2023. Prices for nonfuel imports edged down 0.1% in August. Prices for U.S. exports fell 0.7% in August, after advancing 0.5% the previous month. Lower prices for nonagricultural and agricultural exports each contributed to the decrease in U.S. export prices in August. U.S. export prices fell 0.7% for the year ended in August, the first 12-month drop since April 2024.
The international trade in goods deficit was $94.3 billion in August, down $8.6 billion, or 8.3%, from July. Exports of goods were $177.0 billion in August, 2.4% over July exports. Imports of goods were $253.8 billion in August, 1.6% below the July estimate. Since August 2023, exports increased 4.1%, while imports increased 6.9%.
The latest information on international trade in goods and services, released September 4, is for July and revealed that the goods and services trade deficit was $78.8 billion, up $5.8 billion, or 7.9%, from the June deficit. July exports were $266.6 billion, 0.5% more than June exports. July imports were $345.4 billion, 2.1% above June’s estimate. Year to date, the goods and services deficit increased $36.2 billion, or 7.7%, from the same period in 2023. Exports increased $65.9 billion, or 3.7%. Imports increased $102.1 billion, or 4.5%.
International markets: China’s stock market, which had been tumbling for several months, shot higher at the end of September on the heels of the most aggressive stimulus measures since the pandemic, which included interest rate cuts and fiscal support, in an attempt to rejuvenate China’s sagging economy. Elsewhere, the annual inflation rate in Germany fell to 1.6% in September, the lowest rate since February 2021. Producer prices in Greece fell by 2.4% since August 2023, marking the sharpest deflation since February. Japan’s industrial production fell more than expected in August as motor vehicle output slid 10.6%. For September, the STOXX Europe 600 Index dipped 0.4%; the United Kingdom’s FTSE fell 1.1%; Japan’s Nikkei 225 Index slipped 2.0%; while China’s Shanghai Composite Index jumped 18.7%.
Consumer confidence: Consumer confidence fell in September to 98.7, from an upwardly revised 105.6 in August, according to the Conference Board Consumer Confidence Index®. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell to 124.3 in September, down 10.3 points from the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, declined to 81.7 in September, down from 86.3 in August.
Eye on the Quarter Ahead
The Federal Reserve does not meet in October, so there will be some time to determine the impact of the September 50.0-basis-point rate cut. Of course, all eyes will focus on the results of the presidential and congressional elections in November.
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.
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.
Stocks rebounded from a sour April, closing higher in May. Investors spent the month focused on job gains, gross domestic product, corporate earnings reports, and inflation data in an attempt to determine when the Federal Reserve might cut interest rates. Each of the benchmark indexes listed here reversed the prior month’s losses with notable gains in May. The tech-heavy Nasdaq led the way, followed by the Russell 2000, the S&P 500, the Global Dow, and the Dow. Consumer confidence (see below) exceeded expectations in May, outpacing April’s reading. The labor market showed signs of slowing (see below), while wages inched lower since April 2023.
Inflationary data showed price pressures stabilized in April, with the Consumer Price Index and the Personal Consumption Expenditures Price Index each rising 0.3%. The CPI rose 3.4% for the 12 months ended in April (3.5% for the year ended in March), while the PCE price index was unchanged at 2.7% for the year ended in April. Growth slowed for the U.S. economy, as measured by gross domestic product, which increased 1.3% in the first quarter, following a 3.4% increase in the fourth quarter (see below). This is the weakest rate of growth since the second quarter of 2022. Consumer spending slowed more than expected, coming in at 2.0% in the first quarter compared to 3.3% in the fourth quarter. Spending on services rose 3.9% in the first quarter, following a 3.4% increase in the previous period. Spending on goods dipped 1.9%.
Job growth slowed notably in April (see below). In addition, a slight downward revision to the February estimate and an upward revision to January resulted in employment for those two months being 22,000 lower than previously reported. Wage growth slowed on an annual basis, increasing 3.9% over the last 12 months, down from 4.1% for the 12 months ended in March. New weekly unemployment claims decreased from a year ago, while total claims paid increased (see below).
Corporate profits declined for the first time in a year, falling 0.6%. Nevertheless, about halfway through first-quarter corporate earnings season, S&P 500 companies generally outperformed expectations. About 46% of the S&P 500 companies reported actual earnings, of which 77% have reported earnings per share above estimates. Several sectors have reported favorable earnings results, including communication services, financials, industrials, and information technology. Health care has lagged.
The housing market continued to be influenced by high mortgage rates. Sales of both existing homes and new homes declined in April. Selling prices for existing homes continued to climb, while prices for new homes declined.
Industrial production was flat in April, while manufacturing output declined (see below). According to the latest survey from the S&P Global US Manufacturing Purchasing Managers’ Index™, the manufacturing sector saw its first decline of the year in April. The services sector saw business accelerate but at slower pace than in March as new orders declined for the first time since October.
Among the market sectors in April, information technology, utilities, communication services, and real estate outperformed, while energy lagged.
Bond yields gained as bond prices declined in April. Ten-year Treasury yields generally closed the month higher. The two-year Treasury yield rose nearly 35.0 basis points to about 5.05% on the last day of April. The dollar surged against a basket of world currencies. Gold prices climbed higher. Crude oil prices dipped lower. The retail price of regular gasoline was $3.577 per gallon on May 27, $0.076 below the price a month earlier but $0.006 higher than the price a year ago.
Stock Market Indexes
Market/Index
2023 Close
Prior Month
As of May 31
Monthly Change
YTD Change
DJIA
37,689.54
37,815.92
38,686.32
2.30%
2.64%
Nasdaq
15,011.35
15,657.82
16,735.02
6.88%
11.48%
S&P 500
4,769.83
5,035.69
5,277.51
4.80%
10.64%
Russell 2000
2,027.07
1,973.91
2,070.13
4.87%
2.12%
Global Dow
4,355.28
4,552.50
4,712.83
3.52%
8.21%
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%
4.68%
4.51%
-17 bps
65 bps
US Dollar-DXY
101.39
106.30
104.61
-1.59%
3.18%
Crude Oil-CL=F
$71.30
$81.58
$77.23
-5.33%
8.32%
Gold-GC=F
$2,072.50
$2,302.10
$2,348.50
2.02%
13.32%
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: Total employment increased by 175,000 in April, following an upwardly revised March total of 315,000 new jobs. The April jobs increase was well below the average monthly gain of 242,000 over the prior 12 months. Employment trended up in health care, social assistance, and transportation and warehousing. In April, the unemployment rate increased 0.1 percentage point to 3.9% and was 0.5 percentage point higher than the rate a year earlier. The number of unemployed persons was relatively unchanged at 6.5 million. In April, the number of long-term unemployed (those jobless for 27 weeks or more), at 1.2 million, accounted for 19.6% of all unemployed people. The labor force participation rate, at 62.7%, was unchanged from the prior month, while the employment-population ratio, at 60.2%, decreased 0.1 percentage point from March. In April, average hourly earnings increased by $0.07 to $34.75. Since April 2023, average hourly earnings rose by 3.9%, which is down from the March figure of 4.1%. The average workweek edged down by 0.1 hour to 34.3 hours in April.
There were 219,000 initial claims for unemployment insurance for the week ended May 25, 2024. During the same period, the total number of workers receiving unemployment insurance was 1,791,000. A year ago, there were 231,000 initial claims, while the total number of workers receiving unemployment insurance was 1,729,000.
FOMC/interest rates: The Federal Open Market Committee met at the beginning of the month, the result of which was that interest rates remained unchanged. The Committee noted that there had been a lack of progress toward reaching its inflation goal of 2.0%. Overall, the FOMC maintained its hawkish stance toward lowering interest rates, with no date set for a reduction in the offing.
GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 1.3% in the first quarter of 2024, according to the second estimate from the Bureau of Economic Analysis. GDP increased 3.4% in the fourth quarter. Personal consumption expenditures rose 2.0% in the first quarter compared to a 3.3% increase in the previous quarter. Consumer spending on goods dipped 1.9%, while spending on services rose 3.9%. Gross domestic investment rose 3.2% in the first quarter, well above the 0.7% increase in the fourth quarter. Nonresidential fixed investment advanced 3.3% in the first quarter (3.7% in the fourth quarter), while residential fixed investment increased 15.4% in the first quarter compared to a 2.8% increase in the fourth quarter. Exports inched up 1.2%, while imports, which are a negative in the calculation of GDP, increased 7.7%. Consumer prices increased 3.3% 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 3.6%, compared with an increase of 2.0% in the fourth quarter.
April saw the federal budget enjoy a surplus of $236.0 billion, well below the $210.0 billion from a year earlier. This is up from the April 2023 surplus of $176.0 billion. Government receipts totaled $776.0 billion, of which individual income tax receipts and corporate tax receipts accounted for about $574.0 billion. Through the first seven months of fiscal year 2024, the total deficit sits at $855.0 billion, which is roughly $70.0 billion lower than the deficit through the first seven months of the previous fiscal year. So far in fiscal year 2024, total government receipts were $3.0 trillion ($2.7 trillion in 2023), while government outlays were $3.8 trillion, compared to $3.6 trillion over the same period in the previous fiscal year.
Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income rose 0.3% in April (0.5% in March), while disposable personal income increased 0.2%, down from 0.5% in March. Consumer prices climbed 0.3% in April for the third straight month. Consumer prices excluding food and energy (core prices), rose 0.2% in April, 0.1 percentage point lower than the March increase. Consumer prices rose 2.7% since April 2023, unchanged from the advance for 12 months ended in March. Core prices increased 2.8% over the same period, unchanged from the 12 months ended in March. Consumer spending rose 0.2% in April, well below the 0.7% increase in both February and March.
The Consumer Price Index rose 0.3% in April, 0.1 percentage point lower than the March increase. Over the 12 months ended in April, the CPI rose 3.4%, down 0.1 percentage point from the period ended in March. Excluding food and energy, the CPI rose 0.3% in April, (0.4% in March), and 3.6% from April 2023. Increases in prices for shelter (0.4%) and gasoline (2.8%) accounted for over 70.0% of the overall increase in the CPI. rose in March. Energy prices rose 1.1% over the month. Food prices were unchanged.
Prices that producers received for goods and services rose 0.5% in April after falling 0.1% (revised) in March. Producer prices increased 2.2% for the 12 months ended in April, up from the 1.8% increase for the 12 months ended in March. Producer prices less foods, energy, and trade services advanced 0.4% in April (0.2% in March), while prices excluding food and energy increased 0.5%. For the 12 months ended in April, prices less foods, energy, and trade services moved up 3.1%., up from 2.8% for the 12 months ended in March. Prices less foods and energy increased 2.4% for the year ended in April, unchanged from the period ended in March.
Housing: Sales of existing homes fell 1.9% in April and 1.9% over the last 12 months. According to the National Association of Realtors®, existing home sales have stagnated because interest rates have not moved lower. The median existing-home price was $407,600 in April, up from the March price of $392,900 and well above the April 2023 price of $385,800. Unsold inventory of existing homes represented a 3.5-month supply at the current sales pace, up slightly from 3.2 months in March. Sales of existing single-family homes decreased 2.1% in April and 1.3% from the prior year. The median existing single-family home price was $412,100 in April, up from $396,600 in March and up 5.6% from March 2023. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.02% as of May 16, down from 7.09% the previous week and up from 6.39% one year ago.
New single-family home sales also declined in April, falling 4.7% below the March pace and 7.7% under the April 2023 rate. The median sales price of new single-family houses sold in April was $433,500 ($439,500 in March). The April average sales price was $505,700 ($527,400 in March). The inventory of new single-family homes for sale in April represented a supply of 9.1 months at the current sales pace, up from 6.9 months in March.
Manufacturing: Industrial production was unchanged in April, after inching up 0.1% in March. Manufacturing output decreased 0.3% in April. Mining decreased 0.6% in April, while utilities increased 2.8%. For the 12 months ended in April, total industrial production fell 0.4% from its year-earlier level. For the 12 months ended in April, manufacturing fell 0.5%, mining decreased 1.3%, while utilities increased 2.3%.
New orders for durable goods rose 0.7% in April following a 0.8% March increase, marking the third consecutive monthly increase. Excluding transportation, new orders increased 0.4% in April. Excluding defense, new orders were flat. New orders for transportation equipment advanced 1.2% in April, contributing to the overall increase in new orders. New orders for nondefense capital goods in April decreased 1.5%, while new orders for defense capital goods increased 15.2%.
Imports and exports: U.S. import prices advanced 0.9% in April following a 0.6% advance in the previous month. The April increase was the largest one-month jump since March 2022. Import prices last declined in December 2023. Import prices advanced 1.1% over the last 12 months, the largest yearly increase since December 2022. Import fuel prices rose 2.4% in April. Import prices excluding fuel ticked up 0.7% in April. Export prices rose 0.5% in April after advancing 0.1% in March. Export prices have not decreased since December 2023. Higher nonagricultural prices in April more than offset lower agricultural prices. Despite the recent increases, prices for exports declined 1.0% over the past year, the smallest one-year drop since February 2023.
The international trade in goods deficit was $99.4 billion in April, up $7.1 billion, or 7.7%, from March. Exports of goods were $169.9 billion in April, $0.9 billion, or 0.5%, less than in March. Imports of goods were $269.3 billion in April, $8.0 billion, or 4.4%, under the March estimate. Since April 2023, exports increased 4.2%, while imports increased 3.2%.
The latest information on international trade in goods and services, released May 2, is for March and revealed that the goods and services trade deficit was $69.4 billion, down $0.1 billion, or 0.1%, from the February deficit. March exports were $257.6 billion, 2.0% less than February exports. March imports were $327.0 billion, 1.6% under February imports. Year over year, the goods and services deficit increased $6.5 billion, or 3.2%, from the same period in 2023. Exports increased $9.1 billion, or 1.2%. Imports increased $15.6 billion, or 1.6%.
International markets: Eurozone inflation rose for the first time in five months, climbing to 2.6% in May, up from 2.4% in each of the previous two months. Price advances for energy and services helped drive the overall increase. Prices rose more than expected in Germany (2.8%), France (2.7%), Spain (3.8%), and Italy (0.8%). Canada saw its economy expand by 0.4% in the first quarter of 2024, driven higher, in part, by a 0.7% increase in household spending. Since the first quarter of 2023, Canadian GDP expanded 1.7%. China’s manufacturing receded in May as new export orders declined. For May, the STOXX Europe 600 Index rose 2.6%; the United Kingdom’s FTSE gained 0.8%; Japan’s Nikkei 225 Index advanced 0.7%; and China’s Shanghai Composite Index fell 0.6%.
Consumer confidence: Consumer confidence exceeded expectations in May. The Conference Board Consumer Confidence Index® was 102.0 in May, well above a slightly upwardly revised 97.5 in April. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, increased to 143.1 in May, up from 140.6 in the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, rose to 74.6 in May from 68.8 in April.
Eye on the Month Ahead
The Federal Open Market Committee meets for the second straight month in June. Job growth in April was notably slower. However, inflation remained elevated. Investors will focus on how the Fed assesses this information in determining its policy stance moving forward.
Both the S&P 500 and the Nasdaq advanced for the fourth straight week, which is the first time that has happened since February. Not to be outdone, the Dow advanced for a fifth straight week. Much of the week’s focus was on inflation data (see below). Investors will now look to responsive comments from Federal Reserve officials for any potential changes in interest rate expectations. Information technology and real estate led the market sectors, while consumer discretionary and industrials closed in the red. The dollar slipped nearly 0.75% against a basket of currencies. Gold prices advanced over 2.0% for the week and nearly 17.0% for the year. Crude oil prices climbed more than $1.00 per barrel.
Wall Street ended last Monday with mixed results. The Dow ended its winning streak at eight days after falling 0.2%. The S&P 500 declined less than 0.1%. The Nasdaq rose 0.3%. The Global Dow gained 0.2%, while the Russell 2000 inched up 0.1%. Ten-year Treasury yields dipped to 4.48%. Crude oil prices gained $0.93 to $79.19 per barrel. The dollar (-0.1%) and gold prices (-1.3%) declined.
Last Tuesday saw stocks end higher ahead of the release of Wednesday’s Consumer Price Index. The Russell 2000 led the benchmark indexes listed here, climbing 1.2%, followed by the Nasdaq (0.8%), the S&P 500 (0.5%), the Global Dow (0.4%), and the Dow (0.3%). The yield on 10-year Treasuries fell 3.6 basis points to 4.44%. Crude oil prices dipped $1.00 to $78.14 per barrel. The dollar fell 0.2%, while gold prices advanced 0.8%.
Stocks rallied last Wednesday with the Nasdaq, the Dow, and the S&P 500 closing at record highs. Investors were buoyed by a softer Consumer Price Index, which showed inflation slowed somewhat in April. The Nasdaq gained 1.4%, the S&P 500 advanced 1.2%, and the Russell 2000 climbed 1.1%. The Dow rose 0.9% and the Global Dow gained 0.8%. Ten-year Treasury yields fell 8.9 basis points to 4.35%. Crude oil prices rose to $78.84 per barrel, up $0.82. The dollar fell 0.7%, while gold prices climbed 1.4%.
After reaching record highs on Wednesday, the Nasdaq (-0.3%), the S&P 500 (-0.2%), and the Dow (-0.1%) dipped lower on Thursday. The Russell 2000 fell 0.6% and the Global Dow slipped 0.1%. Ten-year Treasury yields closed the session at 4.37% after gaining 2.1 basis points. Crude oil prices rose $0.66 to $79.29 per barrel. The dollar ticked up 0.2%, while gold prices fell 0.6%.
Stocks ended the week with mixed results. The Dow (0.3%) closed at a new record high. The S&P 500 and the Global Dow ticked up 0.1%, while the Nasdaq fell 0.1%. The Russell 2000 dipped less than 0.1%. Yields on 10-year Treasuries gained 4.3 basis points to close the day and the week at 4.42%. Crude oil prices rose $0.72, the dollar was flat, while gold prices climbed 1.4%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 5/17
Weekly Change
YTD Change
DJIA
37,689.54
39,512.84
40,003.59
1.24%
6.14%
Nasdaq
15,011.35
16,340.87
16,685.97
2.11%
11.16%
S&P 500
4,769.83
5,222.68
5,303.27
1.54%
11.18%
Russell 2000
2,027.07
2,059.78
2,095.72
1.74%
3.39%
Global Dow
4,355.28
4,690.89
4,755.15
1.37%
9.18%
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%
4.50%
4.42%
-8 bps
56 bps
US Dollar-DXY
101.39
105.31
104.48
-0.79%
3.05%
Crude Oil-CL=F
$71.30
$78.32
$79.97
2.11%
12.16%
Gold-GC=F
$2,072.50
$2,369.50
$2,420.20
2.14%
16.78%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
Consumer prices rose 0.3% in April after rising 0.4% in March. Over the last 12 months, consumer prices were up 3.4%. Excluding food and energy, consumer prices rose 0.3% for the month and 3.6% for the year. While prices may have decreased some, they remain well above the Federal Reserve’s 2.0% target, which likely means no interest rate cuts are in the offing. Increases in prices for shelter (0.4%) and gasoline (2.8%) accounted for more than 70% of the overall increase in April. Prices for food were unchanged last month.
Inflationary pressures were evident at the producer level, where April’s increase exceeded expectations. Prices at the producer level rose 0.5% in April, while core prices, excluding food and energy, also rose 0.5% last month. For the year, producer prices have risen 2.2%, the largest increase in a year. Nearly 75% of the April increase was attributable to a 0.6% increase in prices for services. Prices for goods moved up 0.4%.
Retail and food services sales were unchanged in April after increasing 0.6% in March. Retail sales excluding motor vehicles rose 0.2%, while sales excluding motor vehicles and gasoline were down 0.1% last month. Prices at the pump rose 3.1% in April, reflecting higher product prices plus an increase in sales volume during the spring holiday travel period. Over the last 12 months, retail sales rose 3.0%. Nonstore retailers saw sales increase 7.5% from last year, while sales at food services and drinking places were up 5.5% from April 2023.
Import prices increased 0.9% in April, after advancing 0.6% in March. The April increase in import prices was the largest one-month advance since March 2022. Over the last 12 months, import prices advanced 1.1%, the largest 12-month increase since December 2022. Prices for exports increased 0.5% in April following a 0.1% advance the previous month. Export prices have not decreased on a monthly basis since December 2023. Despite the recent increases, export prices declined 1.0% over the past year, the smallest over-the-year drop since February 2023.
Total industrial production was unchanged in April from March. Industrial production in April was 0.4% below its April 2023 level. Manufacturing output decreased 0.3%. Excluding motor vehicles and parts, manufacturing output edged down 0.1%. Mining fell 0.6%, while utilities rose 2.8%.
The number of residential building permits issued in April declined by 3.0% from the March estimate and 2.0% below the April 2023 rate. Permits for single-family home construction were 0.8% below the March figure. The number of housing starts, on the other hand, rose 5.7% in April but were 0.6% below the estimate from a year earlier. Single-family housing starts dipped 0.4% last month. Housing completions rose 8.6% in April and 14.6% above the April 2023 rate. Completions of single-family homes jumped 15.4% last month.
The national average retail price for regular gasoline was $3.608 per gallon on May 13, $0.035 per gallon below the prior week’s price but $0.072 per gallon more than a year ago. Also, as of May 13, the East Coast price fell $0.058 to $3.491 per gallon; the Midwest price increased $0.038 to $3.434 per gallon; the Gulf Coast price decreased $0.076 to $3.168 per gallon; the Rocky Mountain price declined $0.062 to $3.401 per gallon; and the West Coast price decreased $0.060 to $4.694 per gallon.
For the week ended May 11, there were 222,000 new claims for unemployment insurance, a decrease of 10,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended May 4 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended May 4 was 1,794,000, an increase of 13,000 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 April 27 were in New Jersey (2.4%), California (2.3%), Massachusetts (1.8%), Rhode Island (1.8%), Illinois (1.7%), New York (1.7%), Alaska (1.6%), Nevada (1.6%), Washington (1.6%), Connecticut (1.5%), and Minnesota (1.5%). The largest increases in initial claims for unemployment insurance for the week ended May 4 were in New York (+10,171), California (+3,595), Indiana (+2,367), Illinois (+1,836), and Texas (+1,253), while the largest decreases were in Iowa (-1,177), New Hampshire (-435), Connecticut (-334), Louisiana (-213), and Kentucky (-208).
Eye on the Week Ahead
This week, the April data on sales of existing homes and new homes is released. March saw sales of existing homes decline, helping to draw sales down 3.7% over the last 12 months. New home sales advanced in March and are up over 8.0% for the year.
Stocks ended April lower, with each of the benchmark indexes enduring their first downturn in several months. Throughout April, investors had to factor in the escalating crisis in the Middle East, increased spending to support Ukraine in its war with Russia, rising inflation, and the Federal Reserve’s apparent intent to hold interest rates at a two-decade high. With April’s decline, the S&P 500 was on track to end a streak of five straight monthly gains. Consumer confidence (see below) fell in April to its lowest level since 2022. While the labor market continued to support job growth, labor costs increased the most in a year, driven higher by wage pressures that are helping to push inflation higher.
Inflationary data showed price pressures continued to rise in March, with the Consumer Price Index and the Personal Consumption Expenditures Price Index rising 0.4% and 0.3%, respectively, unchanged from the prior month. The CPI rose 3.5% for the 12 months ended in March (3.2% for the year ended in February), while the PCE Price Index increased 0.2 percentage point to 2.7% for the year ended in March. The U.S. economy, as measured by gross domestic product, increased 1.6% in the first quarter, following a 3.4% increase in the fourth quarter (see below). This is the weakest rate of growth since the second quarter of 2022. Consumer spending slowed more than expected, coming in at 2.5% in the first quarter compared to 3.3% in the fourth quarter. Spending on services rose 4.0% in the first quarter, following a 3.4% increase in the previous period.
Job growth continued in March (see below). In addition, a slight downward revision to the February estimate and an upward revision to January yielded a net upward revision of 22,000 in the two months preceding March. Wages continued to rise, increasing 4.1% over the last 12 months. New unemployment claims decreased from a year ago, while total claims paid increased (see below).
At the mid-point of Q1 corporate earnings season, S&P 500 companies continued to generally outperform expectations. Overall, roughly 46% of the S&P 500 companies have reported actual earnings results. Of those companies, 77% have reported earnings per share above estimates. Multiple sectors have reported favorable earnings results, including communication services, financials, industrials, and information technology. Health care has lagged.
The housing market continued to be influenced by high mortgage rates and available inventory. Sales of existing homes declined, while sales of new single-family homes increased. Selling prices for new homes and existing homes continued to climb.
Industrial production ticked higher in March for the second consecutive month. According to the latest survey from the S&P Global US Manufacturing Purchasing Managers’ Index™, the manufacturing sector saw its highest rate of expansion in 22 months in March. The services sector saw business accelerate but at its slowest pace in the last three months.
Among the market sectors, only utilities ended April higher. The remaining 10 sectors ended in the red, with real estate (-8.4%), information technology (-5.3%), and health care (-5.2%) falling the furthest.
Bond yields gained as bond prices declined in April. Ten-year Treasury yields generally closed the month higher. The 2-year Treasury yield rose nearly 35.0 basis points to about 5.05% on the last day of April. The dollar surged against a basket of world currencies. Gold prices climbed higher. Crude oil prices dipped lower. The retail price of regular gasoline was $3.653 per gallon on April 29, $0.130 above the price a month earlier and $0.053 higher than the price a year ago.
Stock Market Indexes
Market/Index
2023 Close
Prior Month
As of April 30
Monthly Change
YTD Change
DJIA
37,689.54
39,807.37
37,815.92
-5.00%
0.34%
Nasdaq
15,011.35
16,379.46
15,657.82
-4.41%
4.31%
S&P 500
4,769.83
5,254.35
5,035.69
-4.16%
5.57%
Russell 2000
2,027.07
2,124.55
1,973.91
-7.09%
-2.62%
Global Dow
4,355.28
4,676.17
4,552.50
-2.64%
4.53%
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%
4.68%
48 bps
82 bps
US Dollar-DXY
101.39
104.55
106.30
1.67%
4.84%
Crude Oil-CL=F
$71.30
$83.06
$81.58
-1.78%
14.42%
Gold-GC=F
$2,072.50
$2,244.70
$2,302.10
2.56%
11.08%
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: Total employment increased by 303,000 in March, following a downwardly revised February total of 270,000 new jobs. Employment trended up in health care, government, and construction. Over the 12 months ended in March, employment increased by an average of 231,000 per month. In March, the unemployment rate dipped 0.1 percentage point to 3.8% but was 0.3 percentage point higher than the rate a year earlier. The number of unemployed persons was relatively unchanged at 6.4 million, which was nearly 500,000 above the March 2023 figure. In March, the number of long-term unemployed (those jobless for 27 weeks or more), at 1.2 million, accounted for 19.5% of all unemployed people. Both the labor force participation rate, at 62.7%, and the employment-population ratio, at 60.3%, increased 0.2 percentage point from February. In March, average hourly earnings increased by $0.12 to $34.69. Since March 2023, average hourly earnings rose by 4.1%. The average workweek increased by 0.1 hour to 34.4 hours in March.
There were 207,000 initial claims for unemployment insurance for the week ended April 20, 2024. During the same period, the total number of workers receiving unemployment insurance was 1,781,000. A year ago, there were 209,000 initial claims, while the total number of workers receiving unemployment insurance was 1,722,000.
FOMC/interest rates: The Federal Open Market Committee began its meeting at the end of April, with the results available after issuance of this report. Nevertheless, all indications are that the Fed will not decrease interest rates in May or June. The Fed is also likely to adjust its forecast of three interest rate reductions this year.
GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 1.6% in the first quarter of 2024, according to the initial estimate from the Bureau of Economic Analysis. GDP increased 3.4% in the fourth quarter. Personal consumption expenditures rose 2.5% in the first quarter compared to a 3.3% increase in the previous quarter. Consumer spending on goods dipped 0.4%, while spending on services rose 4.0%. Gross domestic investment rose 3.2% in the first quarter, well above the 0.7% increase in the fourth quarter. Nonresidential fixed investment advanced 2.9% in the first quarter (3.7% in the fourth quarter), while residential fixed investment jumped 13.9% in the first quarter compared to a 2.8% increase in the fourth quarter. Exports inched up 0.9%, while imports, which are a negative in the calculation of GDP, increased 7.2%. 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.
March saw the federal budget deficit come in at $236.0 billion, well below the $296.0 billion February deficit. Through the first six months of fiscal year 2024, the total deficit sits at $1,065.0 billion, which is roughly $36.0 billion lower than the deficit through the first six months of the previous fiscal year. So far in fiscal year 2024, total government receipts were $2.2 trillion ($2.0 trillion in 2023), while government outlays were $3.3 trillion, compared to $3.1 trillion over the same period in the previous fiscal year.
Inflation/consumer spending: According to the latest personal income and outlays report, personal income rose 0.5% in March (0.3% in February), while disposable personal income increased 0.5%, up from 0.2% in February. Consumer prices climbed 0.3% in March, the same increase as in the previous month. Consumer prices excluding food and energy (core prices), rose 0.3% in March, the same as in February. Consumer prices rose 2.7% since March 2023, 0.2 percentage point more than the advance for the 12 months ended in February. Core prices increased 2.8% over the same period, unchanged from the 12 months ended in February. Consumer spending rose 0.8% in March, the same increase as in February.
The Consumer Price Index rose 0.4% in March, the same increase as in February. Over the 12 months ended in March, the CPI rose 3.5%, up 0.3 percentage point from the period ended in February. Excluding food and energy, the CPI rose 0.4% in March, unchanged from the previous month, and 3.8% from March 2023. Prices for shelter rose in March, as did prices for gasoline. Combined, these two indexes contributed over half of the monthly increase in the CPI for all items. Energy prices rose 1.1% over the month. Food prices rose 0.1% in March.
Prices that producers received for goods and services rose 0.2% in March following a 0.6% increase in the previous month. Producer prices increased 2.1% for the 12 months ended in March, up from the 1.6% increase for the 12 months ended in February. Producer prices less foods, energy, and trade services advanced 0.2% in March (0.4% in February), while prices excluding food and energy increased 0.2%. For the 12 months ended in March, prices less foods, energy, and trade services moved up 2.8%. Prices less foods and energy increased 2.4% for the year ended in March.
Housing: Sales of existing homes fell 4.3% in March and 3.7% over the last 12 months. According to the National Association of Realtors®, existing home sales have stagnated because interest rates have not moved lower. The median existing-home price was $393,500 in March, up from the February price of $383,800 and well above the March 2023 price of $375,300. Unsold inventory of existing homes represented a 3.2-month supply at the current sales pace, up slightly from 2.9 months in February and above the 2.7-month supply from a year earlier. Sales of existing single-family homes decreased 4.3% in March and 2.8% from the prior year. The median existing single-family home price was $397,200 in March, up from $388,000 in February and above the March 2023 price of $379,500. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.88% as of April 11, up from 6.82% the previous week and from 6.27% one year ago.
New single-family home sales climbed higher in March, increasing 8.8% from February. Sales were up 8.3% from March 2023. The median sales price of new single-family houses sold in March was $430,700 ($406,500 in February). The March average sales price was $524,800 ($488,600 in February). The inventory of new single-family homes for sale in March represented a supply of 6.9 months at the current sales pace, down from 8.0 months in February.
Manufacturing: Industrial production edged up 0.4% in March, the same increase as in the prior month. Manufacturing output rose 0.5% in March, helped in part by a 3.1% gain in motor vehicles and parts. Manufacturing output excluding motor vehicles and parts moved up 0.3%. Mining decreased 1.4%, while utilities increased 2.0%. For the 12 months ended in March, total industrial production was unchanged compared to its year-earlier level. For the 12 months ended in March, manufacturing increased 0.8%, mining fell 2.0%, and utilities decreased 3.1%.
New orders for durable goods rose 2.6% in March following a 0.7% (revised) February increase. Excluding transportation, new orders increased 0.2% in March. Excluding defense, new orders rose 2.3%. New orders for transportation equipment advanced 7.7% in March, contributing to the overall increase in new orders. New orders for nondefense capital goods in March increased 5.4%, while new orders for defense capital goods increased 10.6%.
Imports and exports: U.S. import prices advanced 0.4% in March following a 0.3% advance in the previous month. Import prices increased for the third straight month in March, and have advanced 0.4% over the last 12 months, the first yearly increase since January 2023. Import fuel prices rose 4.7% in March, the largest one-month increase since September 2023. Import prices excluding fuel ticked up 0.1% in March. Export prices rose 0.3% in March after advancing 0.7% in February. Higher nonagricultural prices in March more than offset lower agricultural prices. Despite the recent increases, export prices fell 1.4% from March 2023, the smallest 12-month drop since the year ended February 2023.
The international trade in goods deficit was $91.8 billion in March, up $1.5 billion, or 1.7%, from February. Exports of goods were $169.2 billion in March, $6.1 billion, or 3.5%, less than in February. Imports of goods were $261.0 billion in March, $6.1 billion, or 1.7%, under the February estimate. Since March 2023, exports declined 2.1%, while imports increased 2.5%.
The latest information on international trade in goods and services, released April 4, is for February and revealed that the goods and services trade deficit was $68.9 billion, up $1.3 billion, or 1.9%, from the January deficit. February exports were $263.0 billion, 2.3% more than January exports. February imports were $331.9 billion, 2.2% more than January imports. Year over year, the goods and services deficit decreased $3.9 billion, or 2.8%, from February 2023. Exports increased $9.3 billion, or 1.8%. Imports increased $5.4 billion, or 0.8%.
International markets: Eurozone inflation remained at 2.4% in April, in line with expectations. Prices advanced for food, alcohol, and tobacco, while energy prices decreased. For April, consumer prices rose 0.4%. On a positive note, Eurozone gross domestic product expanded by 0.3% in the first quarter, the fastest rate of growth since the third quarter of 2022. China’s manufacturing activity expanded in April for the second consecutive month, albeit at a slower pace than in the previous month. The Japanese yen weakened against the dollar as U.S. interest rates have climbed while Japan’s rate has remained near zero. The result is money has flowed out of the yen and into higher-yielding assets. For April, the STOXX Europe 600 Index fell 0.4%; the United Kingdom’s FTSE gained 2.9%; Japan’s Nikkei 225 Index declined 3.5%; and China’s Shanghai Composite Index gained 1.0%.
Consumer confidence: Consumer confidence receded for the third consecutive month in April. The Conference Board Consumer Confidence Index® was 97.0 in April, well under a downwardly revised 103.1 in March. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, declined to 142.9 in April, down from 146.8 in the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, slipped to 66.4 in April, down from 74.0 in March.
Eye on the Month Ahead
May begins with the Federal Open Market Committee meeting. The employment figures for April are also available early in the month. Investors will also be focused on corporate earnings throughout the month and impact of ongoing tensions in the Middle East. Despite April’s slide, May has historically been a positive month for stocks.
Stocks closed last week higher, driven up by tech and communication shares. Each of the benchmark indexes listed here climbed higher, led by the Nasdaq, which rose more than 4.0%. With nearly 50.0% of S&P 500 companies reporting first-quarter earnings, 77.0% reported positive earnings per share and 60.0% reported positive revenue according to the latest information from FactSet). Each of the market sectors closed last week ahead, with consumer staples and information technology leading the way. Ten-year Treasury yields rose 5.0 basis points. The dollar was relatively flat. Crude oil prices gained 0.5%, while gold prices fell 2.2%.
Wall Street saw an end to the bear run last Monday. Each of the benchmark indexes listed here posted solid gains, led by the Nasdaq, which climbed 1.1%. The Russell 2000 gained 1.0%, followed by the S&P 500 (0.9%), the Global Dow (0.8%), and the Dow (0.7%). Tensions in the Middle East eased, at least temporarily, as investors looked forward to a week of corporate earnings and key economic data. Each of the market sectors gained ground, with financials and information technology leading the way. The yield on 10-year Treasuries settled at 4.62%. The dollar was flat, while gold prices fell nearly 3.0%. Crude oil prices closed at $83.02 per barrel.
Stocks posted gains for the second straight day last Tuesday. The Russell 2000 (1.8%) and the Nasdaq (1.6%) led the benchmark indexes listed here, followed by the S&P 500 (1.2%), the Global Dow (1.0%), and the Dow (0.7%). Ten-year Treasury yields slipped to 4.57%. Crude oil prices rose $1.40 to $83.29 per barrel. The dollar and gold prices declined.
Stocks were mixed last Wednesday, unable to gain traction throughout the day. A strong set of earnings reports wasn’t enough to overcome investor concerns about rising interest rates. The Nasdaq, the S&P 500, and the Global Dow barely closed in the black, while the Russell 2000 fell 0.4% and the Dow dipped 0.1%. Ten-year Treasury yields gained 5.4 basis points to close at 4.57%. Crude oil prices lost $0.48 to settle at $82.88 per barrel. The dollar edged up 0.1%, while gold prices fell 0.4%.
Last Thursday saw stocks fall sharply after a lower-than-expected gross domestic product for the first quarter. The Dow fell 1.0%, followed by the Russell 2000 (-0.7%), the Nasdaq (-0.6%), the S&P 500 (-0.5%), and the Global Dow (-0.4%). Ten-year Treasury yields settled at 4.70%, an increase of 5.4 basis points. Crude oil prices climbed nearly $1.00 to $83.78 per barrel. The dollar dipped 0.3%, while gold prices gained 0.3%.
Strong earnings reports from some large tech companies helped propel stocks higher last Friday. The Nasdaq gained 2.0% on the day, while the S&P 500 and the Russell 2000 rose 1.0%. The Dow and the Global Dow advanced 0.4%. Ten-year Treasury yields slipped 3.7 basis points to 4.66%. Crude oil prices inched up $0.08. The dollar advanced 0.4%, while gold prices rose 0.3%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 4/26
Weekly Change
YTD Change
DJIA
37,689.54
37,986.40
38,239.66
0.67%
1.46%
Nasdaq
15,011.35
15,282.01
15,927.90
4.23%
6.11%
S&P 500
4,769.83
4,967.23
5,099.96
2.67%
6.92%
Russell 2000
2,027.07
1,947.66
2,002.00
2.79%
-1.24%
Global Dow
4,355.28
4,489.43
4,571.51
1.83%
4.96%
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%
4.61%
4.66%
5 bps
80 bps
US Dollar-DXY
101.39
106.13
106.09
-0.04%
4.64%
Crude Oil-CL=F
$71.30
$83.25
$83.65
0.48%
17.32%
Gold-GC=F
$2,072.50
$2,402.90
$2,350.20
-2.19%
13.40%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
Gross domestic product increased 1.6% in the first quarter of 2024, according to the advance estimate, which is somewhat based on incomplete source data. Compared to the fourth quarter, the decline in GDP in the first quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending, and a downturn in federal government spending. These movements were partly offset by an acceleration in residential fixed investment. Imports, which are a negative in the calculation of GDP, accelerated. The personal consumption expenditures price index increased 3.4% in the first quarter, compared with a fourth-quarter increase of 1.8%. Excluding food and energy prices, the PCE price index increased 3.7% in the first quarter, compared with an increase of 2.0% in the previous quarter.
Consumer prices rose 0.3% in March and 2.7% over the last 12 months. Prices less food and energy also increased 0.3% for the month and 2.8% for the year. The annual rates, as aforementioned, are above expectations. Consumer spending rose 0.8% last month, while personal income increased 0.5%.
Sales of new single-family homes in March were 8.8% above the February estimate and 8.3% over a year ago. The median sales price of new homes sold in March was $430,700. The average sales price was $524,800. Inventory of new single-family homes for sale in March sat at an 8.3-month supply at the current sales pace.
Orders for durable goods rose 2.6% in March after rising 0.7% in February. Transportation equipment, led the increase, rising 7.7%. Excluding transportation, new orders increased 0.2%. Excluding defense, new orders increased 2.3%. New orders for nondefense capital goods in March advanced 5.4%. New orders for defense capital goods jumped 10.6% last month.
The advance report on the international trade in goods deficit was $91.8 billion in March, up $1.5 billion, or 1.7%, from $90.3 billion in February. Exports of goods for March were $169.2 billion, $6.1 billion, or 3.5%, less than February exports. Imports of goods for March were $261.0 billion, $4.6 billion, or 1.7%, less than February imports.
The national average retail price for regular gasoline was $3.668 per gallon on April 22, $0.040 per gallon above the prior week’s price and $0.012 per gallon more than a year ago. Also, as of April 22, the East Coast price increased $0.089 to $3.540 per gallon; the Midwest price dipped $0.002 to $3.463 per gallon; the Gulf Coast price increased $0.055 to $3.232 per gallon; the Rocky Mountain price rose $0.028 to $3.456 per gallon; and the West Coast price decreased $0.021 to $4.832 per gallon.
For the week ended April 20, there were 207,000 new claims for unemployment insurance, a decrease of 5,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended April 13 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended April 13 was 1,781,000, a decrease of 15,000 from the previous week’s level, which was revised down by 16,000. States and territories with the highest insured unemployment rates for the week ended April 6 were New Jersey (2.7%), California (2.3%), Rhode Island (2.1%), Massachusetts (2.0%), Minnesota (2.0%), Illinois (1.9%), New York (1.9%), Pennsylvania (1.7%), Washington (1.7%), Alaska (1.6%), Nevada (1.6%), and Puerto Rico (1.6%). The largest increases in initial claims for unemployment insurance for the week ended April 13 were in California (+2,405), Connecticut (+1,613), Georgia (+1,419), Oregon (+1,397), and New York (+506), while the largest decreases were in New Jersey (-4,370), Wisconsin (-1,843), Pennsylvania (-1,604), Illinois (-1,573), and Minnesota (-1,274).
Eye on the Week Ahead
The Federal Open Market Committee meets this week. It is unlikely that interest rates will be lowered following this meeting. However, it will be interesting to see if the Committee changes its projections for interest rate reductions going forward. Following their last meeting, the Fed projected three interest rate reductions during 2024. Also out this week is the jobs data for April. Over 300,000 new jobs were added in March as the labor sector continued to show strength.
Wall Street endured another down week as tech shares, which had been the bellwether of the bull market, were hit hard by major selloffs as investors worried about rising tensions in the Middle East and stubborn inflationary pressures. The Dow managed to essentially break even by week’s end, and that was the good news. The remaining benchmark indexes listed here declined, with the Nasdaq losing more than 5.5%. Last week saw several Federal Reserve officials taking a more hawkish stance due to hotter-than-anticipated inflation data. Ten-year Treasury yields gained 12.0 basis points as bond values slid lower. Crude oil prices declined, while gold prices extended their streak of gains.
Last Monday saw Wall Street extend losses from the previous week as rising tensions in the Middle East weighed on the markets. The Nasdaq fell 1.8%, followed by the Russell 2000 (-1.4%), the S&P 500 (-1.2%), the Dow (-0.7%), and the Global Dow (-0.5%). Money flowed into long-term bonds sending prices lower and yields higher. Ten-year Treasury yields closed at 4.52% after adding 12.9 basis points. Crude oil prices were flat. The dollar inched up 0.2%, while gold prices rose 1.1%.
Stocks continued to trend lower last Tuesday as bond yields climbed higher following hawkish comments from Fed Chair Jerome Powell. Among the benchmark indexes listed here, only the Dow ticked higher, gaining 0.2%. The Global Dow fell 1.1%, the Russell 2000 dropped 0.4%, the S&P 500 dipped 0.2%, while the Nasdaq edged 0.1% lower. Ten-year Treasury yields settled at 4.65% after gaining 3.1 basis points. Crude oil prices were relatively unchanged, closing at about $85.34 per barrel. The dollar gained 0.2% and gold prices rose 0.8%.
Tech stocks led a stock slide last Wednesday, with the Nasdaq falling 1.2%. The Russell 2000 lost 0.9%, the S&P 500 declined 0.6%, the Dow dipped 0.1%, while the Global Dow was flat. Ten-year Treasury yields lost 7.4 basis points, settling at 4.58%. Crude oil prices declined for the second straight day, falling to $82.74 per barrel. The dollar and gold prices ended in the red.
Last Thursday saw the Nasdaq (-0.5%) and the S&P 500 (-0.2%) extend their losing streaks to five straight sessions. The Russell 2000 fell 0.3%, while the Dow (0.1%) and the Global Dow (0.4%) edged higher. Bonds lost value, driving yields higher with 10-year Treasury yields climbing 6.2 basis points to 4.64%. Crude oil prices changed little, settling at about $82.67 per barrel. The dollar and gold prices eked out gains.
The S&P 500 and the Nasdaq ended lower for the sixth consecutive session last Friday. Tech shares were hard hit following a major selloff of the world’s largest tech companies. The Nasdaq lost 2.1%, the S&P 500 fell 0.9%, and the Global Dow dipped 0.2%. The Dow (0.6%) and the Russell 2000 (0.2%) advanced. Ten-year Treasury yields fell 3.2 basis points. Crude oil prices gained 0.64%. The dollar was flat, while gold prices inched up 0.2%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 4/19
Weekly Change
YTD Change
DJIA
37,689.54
37,983.24
37,986.40
0.01%
0.79%
Nasdaq
15,011.35
16,175.09
15,282.01
-5.52%
1.80%
S&P 500
4,769.83
5,123.41
4,967.23
-3.05%
4.14%
Russell 2000
2,027.07
2,003.17
1,947.66
-2.77%
-3.92%
Global Dow
4,355.28
4,552.22
4,489.43
-1.38%
3.08%
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%
4.49%
4.61%
12 bps
75 bps
US Dollar-DXY
101.39
106.02
106.13
0.10%
4.68%
Crude Oil-CL=F
$71.30
$85.51
$83.25
-2.64%
16.76%
Gold-GC=F
$2,072.50
$2,360.90
$2,402.90
1.78%
15.94%
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 rose 0.7% in March from February and 4.0% from March 2023. Retail trade sales were up 0.8% from February 2024 and up 3.6% above last year. Nonstore retailers were up 2.7% in March and 11.3% from last year, while food services and drinking places rose 0.4% last month and 6.5% from March 2023.
The number of issued residential building permits declined 4.3% in March from the previous month’s estimate, but were 1.5% above the March 2023 rate. Issued building permits for single-family homes decreased 5.7% in March. The number of housing starts fell 14.7% last month and 4.3% below the March 2023 estimate. Single-family housing starts were 12.4% under the February total. Housing completions also declined in March, down 13.5% for the month and 3.9% from a year earlier. Single-family housing completions were 10.5% under the February rate.
Sales of existing homes fell 4.3% in March and 3.7% from a year earlier. Total housing inventory sat at a 3.2-month supply, up from 2.9 months in February. The median existing-home price in March was $393,500, up from $383,800 in February and well above the March 2023 price of $375,300. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.88% as of April 11. That’s up from 6.82% the previous week and 6.27% one year ago. Sales of existing single-family homes also declined in March, falling 4.9% from February and 11.4% from a year ago. The median existing single-family home price in March was $397,200, up from $388,000 in February and higher than the March 2023 estimate of $379,500.
Industrial production rose 0.4% in March but declined at an annual rate of 1.8% in the first quarter. Manufacturing output increased 0.5% in March, boosted in part by a gain of 3.1% in motor vehicles and parts; factory output excluding motor vehicles and parts moved up 0.3%. Mining fell 1.4%, while utilities gained 2.0%. Total industrial production in March was unchanged compared with its year-earlier level.
The national average retail price for regular gasoline was $3.628 per gallon on April 15, $0.037 per gallon more than the prior week’s price but $0.035 per gallon less than a year ago. Also, as of April 15, the East Coast price increased $0.060 to $3.451 per gallon; the Midwest price rose $0.005 to $3.465 per gallon; the Gulf Coast price decreased $0.038 to $3.177 per gallon; the Rocky Mountain price rose $0.048 to $3.428 per gallon; and the West Coast price increased $0.105 to $4.853 per gallon.
For the week ended April 13, there were 212,000 new claims for unemployment insurance, unchanged 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 April 6 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended April 6 was 1,812,000, an increase of 2,000 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 March 30 were New Jersey (2.6%), California (2.4%), Minnesota (2.4%), Rhode Island (2.3%), Massachusetts (2.1%), Illinois (1.9%), New York (1.9%), Pennsylvania (1.8%), Washington (1.8%), and Alaska (1.7%). The largest increases in initial claims for unemployment insurance for the week ended April 6 were in New Jersey (+4,339), New York (+2,499), Pennsylvania (+1,783), Texas (+1,523), and Florida (+977), while the largest decreases were in Iowa (-1,418), California (-631), Ohio (-530), Nevada (-362), and Maryland (-352).
Eye on the Week Ahead
There’s plenty of market-moving economic data available this week. Two important pieces of information that will garner much attention include the advance report on first-quarter gross domestic product. GDP grew at a rate of 3.4% in the fourth quarter but is expected to slow to 2.3% in the first quarter of 2024. Also out this week is the March report on personal income and outlays. Consumer spending rose 0.8% in February, while consumer prices increased 0.3%.
What I'm Watching This Week 