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What I’m Watching This Week – 28 October 2024

Published on October 28, 2024 by dredheadz

The Markets (as of market close October 25, 2024)

Tech shares helped the NASDAQ close up last week. The remaining indexes listed here didn’t fare as well. Renewed concerns about the Federal Reserve’s interest rate policy dampened investor appetite for risk. Bond prices also faded during the week, driving yields higher. Crude oil prices climbed higher as investors monitored ongoing tensions in the Middle East. Gold prices continued to advance and have risen over 33.0% from the beginning of the year.

Stocks mostly retreated last Monday following their longest weekly rally of the year. Of the benchmark indexes listed here, only the NASDAQ (0.3%) posted a gain. The remaining indexes closed in the red, led by the Russell 2000 (-1.6%), followed by the Dow and the Global Dow (-0.8%). The S&P 500 dipped 0.2%. Ten-year Treasury yields rose 10.9 basis points to close at 4.18%, the highest level since late July. Among the market sectors, utilities, materials, financials, real estate, and information technology closed higher, while health care and energy declined. Crude oil prices closed up 1.8% to $70.45 per barrel. The dollar (0.5%) and gold prices (0.2%) posted gains.

In what was akin to the previous day’s performance, stocks closed mostly lower last Tuesday. Once again, the NASDAQ was the only benchmark index to post a gain after ticking up 0.2%, while the Dow and the S&P 500 were essentially unchanged. The Global Dow fell 0.4%, and the Russell 2000 declined 0.3%. The yield on 10-year Treasuries inched up to 4.20%. Crude oil prices jumped 2.4% to settle at $72.24 per barrel. The dollar inched up 0.1%, while gold prices rose 0.9%.

Each of the benchmark indexes listed here retreated last Wednesday as bond yields rose amid investor concerns over further interest rate cuts. Several major tech companies saw their stock values decline, which also placed a drag on Wall Street. The Nasdaq dropped 1.6%, the Dow fell 1.0%, the S&P 500 declined 0.9%, the Russell 2000 lost 0.8%, and the Global Dow dipped 0.6%. Bond values also tumbled, pushing yields higher, with 10-year Treasury yields climbing 3.8 basis points to close the session at 4.24%. Crude oil prices fell 1.0%, falling to $71.03 per barrel. The dollar ticked up 0,3%, while gold prices declined 1.1%.

Stocks closed mostly higher last Thursday with only the Dow (-0.3%) sliding lower. Investors reacted to the latest earnings reports, particularly one involving a major electric automotive manufacturer. The NASDAQ rose 0.8%, the S&P 500 ended a three-session slide after gaining 0.2%. The Russell 2000 also edged up 0.2%, while the Global Dow inched up 0.1%. Ten-year Treasury yields fell to 4.20%. Crude oil prices retreated for the second straight day, settling at $70.47 per barrel. The dollar edged lower, while gold prices (0.7%) recouped some of the losses from the previous session.

Gains in tech shares helped drive the NASDAQ (0.6%) higher last Friday. A decline in financial shares was enough to overshadow tech gains, resulting in losses for the Dow (-0.6%), the Russell 2000 (-0.5%), and the Global Dow (-0.4%). The S&P 500 ended the session flat. Ten-year Treasury yields climbed to 4.23%. Crude oil prices reversed losses from the previous two days, advancing 2.1%. The dollar and gold prices each gained 0.2%.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 10/25	Weekly Change	YTD Change
DJIA	37,689.54	43,275.91	42,114.40	-2.68%	11.74%
NASDAQ	15,011.35	18,489.55	18,518.61	0.16%	23.36%
S&P 500	4,769.83	5,864.67	5,808.12	-0.96%	21.77%
Russell 2000	2,027.07	2,276.09	2,207.99	-2.99%	8.93%
Global Dow	4,355.28	5,043.43	4,939.32	-2.06%	13.41%
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%	4.07%	4.23%	16 bps	37 bps
US Dollar-DXY	101.39	103.46	104.32	0.83%	2.89%
Crude Oil-CL=F	$71.30	$69.35	$71.59	3.23%	0.41%
Gold-GC=F	$2,072.50	$2,736.90	$2,757.40	0.75%	33.05%

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

September, the last month of the fiscal year, saw the government budget enjoy a surplus of $64.3 billion, well off from August’s deficit of $380.1 billion. For fiscal year 2024, the deficit was $1,832.8 trillion, $137.6 billion above the FY23 deficit of $1,695.2 trillion. Compared to the prior fiscal year, FY24 saw government receipts increase by roughly $479.5 billion, while government outlays increased by $617.0 billion.
New orders for manufactured durable goods in September, down three of the last four months, decreased 0.8%, according to the U.S. Census Bureau. This followed a 0.8% August decrease. Excluding transportation, new orders increased 0.4%. Excluding defense, new orders decreased 1.1%. Transportation equipment, also down three of the last four months, drove the decrease after declining 3.1%. New orders for nondefense capital goods in September decreased 4.5%. New orders for defense capital goods rose 6.4% last month. Since September 2023, new orders for durable goods have decreased 1.5%.
Existing-home sales decreased 1.0% in September and 3.5% from one year ago. The median existing-home sales price fell 2.4% in September to $404,500 but was 3.0% above the September 2023 price. The inventory of unsold existing homes, at a supply of 4.3 months, rose by 1.5% from the prior month. Sales of single-family homes edged lower by 0.6% in September and fell 2.3% from a year earlier. The median existing single-family home price was $409,000 in September, down from $419,000 in August but up from $397,400 in September 2023. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.44% as of October 17. That’s up from 6.32% from one week ago but down from 7.63% one year ago.
Sales of new single-family homes in September reached the highest level since May 2023 after rising 4.1% over the prior month’s total. Last month’s sales were 6.3% above the September 2023 estimate. The median sales price of new homes sold in September 2024 was $426,300. The average sales price was $501,000. The estimate of new homes for sale at the end of September represented a supply of 7.6 months at the current sales rate.
The national average retail price for regular gasoline was $3.144 per gallon on October 21, $0.027 per gallon below the prior week’s price and $0.389 per gallon less than a year ago. Also, as of October 21, the East Coast price rose $0.012 to $3.054 per gallon; the Midwest price decreased $0.094 to $3.006 per gallon; the Gulf Coast price inched down $0.015 to $2.720 per gallon; the Rocky Mountain price dipped $0.037 to $3.221 per gallon; and the West Coast price fell $0.013 to $4.034 per gallon.
For the week ended October 19, there were 227,000 new claims for unemployment insurance, a decrease of 15,000 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 October 12 was 1.3%, an increase of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 5 was 1,897,000, an increase of 28,000 from the previous week’s level, which was revised up by 2,000. This is the highest level for insured unemployment since November 13, 2021 when it was 1,974,000. States and territories with the highest insured unemployment rates for the week ended October 5 were New Jersey (2.2%), California (1.9%), Puerto Rico (1.9%), Washington (1.8%), Nevada (1.6%), Rhode Island (1.6%), Massachusetts (1.5%), New York (1.5%), Illinois (1.4%), Alaska (1.3%), Oregon (1.3%), and Pennsylvania (1.3%). The largest increases in initial claims for unemployment insurance for the week ended October 12 were in Georgia (+3,293), New York (+2,340), Pennsylvania (+1,379), Texas (+886), and South Carolina (+779), while the largest decreases were in Michigan (-7,917), Florida (-3,257), Ohio (-2,556), North Carolina (-2,365), and Indiana (-2,173).

Eye on the Week Ahead

There are several market-moving economic reports released this week. Among those reports is the initial estimate of gross domestic product for the third quarter. The second quarter GDP estimated that the economy grew at an annualized rate of 3.0%. The personal consumption expenditures price index, the preferred inflation indicator of the Federal Reserve, is released within the personal income and outlays report. August saw prices tick up 0.1%, while the annual rate of growth rose 2.2%. Lastly, the latest employment data for October is released on Friday. September’s report revealed an unexpected 254,000 new jobs, a figure well above consensus estimates. It is likely that the September figure is adjusted downward.

What I’m Watching This Week – 21 October 2024

Published on October 21, 2024 by dredheadz

The Markets (as of market close October 18, 2024)

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.

What I’m Watching This Week – 14 October 2024

Published on October 14, 2024 by dredheadz

The Markets (as of market close October 11, 2024)

Despite a tepid start, stocks ended last week generally higher. Each of the benchmark indexes listed here posted solid gains with the Dow and the S&P 500 reaching record highs on multiple occasions. Financials and information technology led the market sectors, with consumer discretionary, real estate, communication services, utilities, and energy losing ground. Crude oil prices rose for the second straight week, fueled by escalating tensions in the Middle East and increased fuel demand in Florida on the heels of Hurricane Milton. The dollar and gold prices increased.

Wall Street began the week tumbling lower as investors pondered a further escalation of tensions in the Middle East. All of the benchmark indexes listed here lost value, with the NASDAQ falling 1.2% followed by the S&P 500, which dropped 1.0%. The Dow and the Russell 2000 lost 0.9%, while the Global Dow dipped 0.1%. Long-term bond values also declined, with yields on 10-year Treasuries climbing to 4.02%, the highest since late July, as the strong labor report dampened any chance of another interest rate cut in November. Crude oil prices climbed to $77.38 per barrel, a six-week high, based on fears that a broader conflict in the Middle East could include strikes on Iran’s oil fields. The dollar and gold prices marginally decreased.

Last Tuesday saw stocks rebound, driven by a rally in tech shares. The NASDAQ added 1.5%, the S&P 500 rose 1.0%, the Dow climbed 0.3%, and the Russell 2000 eked out a 0.1% gain. The Global Dow fell 0.5%. Ten-year Treasury yields ticked up to 4.03%. The dollar slipped 0.1%, while gold prices fell 0.9%. Crude oil prices tumbled 4.2% to $73.90 per barrel.

Both the Dow (1.0%) and the S&P 500 (0.7%) climbed to new record highs last Wednesday, ahead of the Consumer Price Index report for September. Investors and forecasters expect the latest data to show that inflation slowed in September. The NASDAQ gained 0.6%, the Global Dow rose 0.4%, and the Russell 2000 inched up 0.3%. Ten-year Treasury yields continued to advance, closing at 4.06%. Crude oil prices slipped 0.2%, settling at $73.46 per barrel. The dollar increased 0.4%, while gold prices fell 0.3%.

Stocks closed slightly lower last Thursday as investors mulled the latest Consumer Price Index, which slowed to its lowest rate since the beginning of 2021, but marginally exceeded market expectations (see below). The Russell 2000 fell 0.6% and the S&P 500 lost 0.2%. The NASDAQ, the Dow, and the Global Dow all declined 0.1% or less. Ten-year Treasury yields ticked up 2.9 basis points to 4.09%. Crude oil prices, driven by rising U.S. demand in the aftermath of Hurricanes Helene and Milton, gained 3.7%, settling at $75.93 per barrel. The dollar fell 0.1%, while gold prices rose 0.8% to $2,647.00 per ounce after sliding to a three-week low in the prior session.

Last Friday saw both the Dow and the S&P 500 reach new record highs. Stocks closed generally higher to end the week as third-quarter earnings season got off on the right foot, with some major banks reporting stronger-than-expected results. The small caps of the Russell 2000 gained 2.1%, the Dow rose 1.0%, the S&P 500 added 0.6%, the Global Dow climbed 0.5%, and the NASDAQ advanced 0.3%. The yield on 10-year Treasuries rose to 4.11% during the session, only to slip back to 4.09%. Crude oil prices fell 0.4%, the dollar slid 0.1%, while gold prices moved up 1.3%.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 10/11	Weekly Change	YTD Change
DJIA	37,689.54	42,352.75	42,863.86	1.21%	13.73%
NASDAQ	15,011.35	18,137.85	18,342.94	1.13%	22.19%
S&P 500	4,769.83	5,751.07	5,815.03	1.11%	21.91%
Russell 2000	2,027.07	2,212.80	2,234.41	0.98%	10.23%
Global Dow	4,355.28	5,006.95	5,022.79	0.32%	15.33%
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%	3.98%	4.09%	11 bps	23 bps
US Dollar-DXY	101.39	102.48	102.93	0.44%	1.52%
Crude Oil-CL=F	$71.30	$74.59	$75.66	1.43%	6.12%
Gold-GC=F	$2,072.50	$2,671.10	$2,672.40	0.05%	28.95%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

The Consumer Price Index rose 0.2% in September, the same increase as in August and July. Prices for shelter rose 0.2% in September and prices for food rose 0.4%. Together, they contributed over 75% of the monthly all items increase. Consumer prices, less food and energy rose 0.3% in September, the same increase as in August. Energy prices fell 1.9% last month after declining 0.8% in August. The all items index rose 2.4% for the 12 months ended September, the smallest 12-month increase since February 2021. Prices less food and energy rose 3.3% over the last 12 months.
The Producer Price Index was unchanged in September after advancing 0.2% in August. For the year, producer prices rose 1.8%. In September, prices for services rose 0.2% but were offset by a 0.2% decline in prices for goods. Producer prices less foods, energy, and trade services inched up 0.1% in September after rising 0.2% in August. For the 12 months ended in September, prices less foods, energy, and trade services increased 3.2%.
The report on international trade in goods and services, released October 8, revealed that the trade deficit in August was $70.4 billion, down $8.5 billion, or 10.8%, from the July estimate. August exports were $271.8 billion, $5.3 billion, or 2.0%, more than July exports. August imports were $342.2 billion, $3.2 billion, or 0.9%, less than July imports. Year to date, the goods and services deficit increased $47.1 billion, or 8.9%, from the same period in 2023. Exports increased $79.0 billion, or 3.9%. Imports increased $126.1 billion, or 4.9%.
The national average retail price for regular gasoline was $3.136 per gallon on October 7, $0.043 per gallon below the prior week’s price and $0.548 per gallon less than a year ago. Also, as of October 7, the East Coast price fell $0.051 to $3.009 per gallon; the Midwest price decreased $0.069 to $3.036 per gallon; the Gulf Coast price rose $0.030 to $2.725 per gallon; the Rocky Mountain price dipped $0.144 to $3.271 per gallon; and the West Coast price decreased $0.015 to $4.027 per gallon.
For the week ended October 5, there were 258,000 new claims for unemployment insurance, an increase of 33,000 from the previous week’s level. This is the highest level for initial claims since August 5, 2023. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 28 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 28 was 1,861,000, an increase of 42,000 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 21 were New Jersey (2.2%), California (2.0%), Puerto Rico (1.9%), Rhode Island (1.8%), Washington (1.7%), 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 September 28 were in Michigan (+1,187), Washington (+892), Indiana (+657), California (+638), and Iowa (+568), while the largest decreases were in Georgia (-1,237), Florida (-919), Texas (-532), Virginia (-481), and New York (-451).

Eye on the Week Ahead

The report on import and export prices for September is available this week. August saw a decrease in both import and export prices. The retail sales report for September is also out this week. Retail and food services sales ticked up 0.1% in August, beating expectations of forecasters. Industrial production rebounded in August after lagging in July. Finally, the September report on housing starts, building permits, and housing completions is released this week. Receding mortgage rates have renewed builder confidence, which led to a rise in building permits and housing starts in August.

What I’m Watching This Week – 7 October 2024

Published on October 6, 2024 by dredheadz

The Markets (as of market close October 4, 2024)

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.

What I’m Watching This Week – 23 September 2024

Published on September 22, 2024 by dredheadz

The Markets (as of market close September 20, 2024)

The interest rate decrease by the Federal Reserve helped drive stocks higher last week. Each of the benchmark indexes listed here closed higher, led by the Russell 2000. Communication services, energy, and utilities were the best performing market sectors, while consumer staples, health care, and real estate lagged. Gold prices surged past $2,600.00 per ounce, hitting a new, record high on Friday. Crude oil prices advanced for the second straight week, while the dollar retreated following the drop in interest rates.

Stocks opened the week with mixed results as investors exercised some caution ahead of the Federal Reserve meeting later in the week. Nevertheless, the Dow rose 0.6%, hitting a new record high, while the Global Dow (0.5%), the Russell 2000 (0.3%), and the S&P 500 (0.1%) also advanced. The tech-heavy NASDAQ saw its rally stop after sliding 0.5%. Bond prices continued to advance with yields moving lower. Ten-year Treasury yields fell 2.9 basis points to 3.62%. Crude oil prices cracked the $70.00 per barrel threshold, closing at $70.45 per barrel. The dollar and gold prices declined.

Wall Street reflected caution last Tuesday as investors remained uncertain about the size of the anticipated interest rate cut. The small caps of the Russell 2000 led the benchmark indexes after climbing 0.7%. The NASDAQ inched up 0.2% and the S&P 500 ticked up less than 0.1%. The Global Dow and the Dow ended the session flat. Ten-year Treasury yields settled at 3.64%. Crude oil prices climbed 1.9% to $71.39 per barrel. The dollar gained 0.2%, while gold prices declined 0.5%.

Despite the Fed lowering interest rates by 50.0 basis points (see below), stocks ended last Wednesday ticking lower. The rate cut is the first in four years, and further adjustments to the Fed’s monetary policy may now focus on the employment sector, which has slowed. The Fed meets two more times this year, and the likelihood of another rate cut of this size is minimal. Among the indexes listed here, only the Russell 2000 closed marginally in the black. The remaining indexes declined, with the Dow, the S&P 500, the NASDAQ, and the Global Dow each falling about 0.3%. Following news of the rate decrease, the dollar inched higher (0.2%), while gold prices fell 0.7%. Ten-year Treasury yields gained 4.3 basis points to close at 3.68%. The rally ended for crude oil prices, which fell 1.7% to $69.99 per barrel.

The interest rate cut from a day earlier boosted stocks last Thursday. Each of the benchmark indexes enjoyed notable gains, with the Dow and S&P 500 recording new record highs. A jump in tech stocks helped propel the NASDAQ 2.5%. The Russell 2000 rose 2.1%, the S&P 500 advanced 1.7%, and both the Dow and the Global Dow increased 1.3%. Ten-year Treasury yields settled at 3.74%, an increase of 5.5 basis points. Crude oil prices advanced 1.6% to $72.07 per barrel. The dollar ticked higher, while gold prices rose 0.5%.

Friday saw stocks close mostly lower, with only the Dow advancing 0.1%. Otherwise, the post-Fed rally waned as the remaining benchmark indexes listed here ended the session in the red. The Russell 2000 fell 1.1%, the NASDAQ dropped 0.4%, while the S&P 500 and the Global Dow each declined 0.2%. The yield on 10-year Treasuries slipped to 3.72%. Crude oil prices dipped 0.3% to $71.77 per barrel. The dollar inched up 0.1%, while gold prices advanced 1.2%.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 9/20	Weekly Change	YTD Change
DJIA	37,689.54	41,393.78	42,063.36	1.62%	11.60%
NASDAQ	15,011.35	17,683.98	17,948.32	1.49%	19.56%
S&P 500	4,769.83	5,626.02	5,702.55	1.36%	19.55%
Russell 2000	2,027.07	2,182.49	2,227.89	2.08%	9.91%
Global Dow	4,355.28	4,882.10	4,946.28	1.31%	13.57%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	4.75%-5.00%	-50 bps	-50 bps
10-year Treasuries	3.86%	3.65%	3.72%	7 bps	-14 bps
US Dollar-DXY	101.39	101.13	100.79	-0.34%	-0.59%
Crude Oil-CL=F	$71.30	$69.26	$71.77	3.62%	0.66%
Gold-GC=F	$2,072.50	$2,608.70	$2,644.90	1.39%	27.62%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

The Federal Open Market Committee, by an 11-1 vote, moved to lower the fed funds target rate range by 50.0 basis points to 4.75%-5.00%. The lone dissenting vote was by Governor Michelle Bowman who preferred a 25.0-basis point reduction. The Committee’s statement indicated that economic activity has continued to expand at a solid pace. Job gains have slowed and, while the unemployment rate has advanced, it remained low. In further support of the rate reduction, the Committee noted that it has gained greater confidence that inflation is moving sustainably toward the 2.0% target and that the risks to achieving its employment and inflation goals are roughly in balance. Further adjustments to the target range for the federal funds rate will be based on an assessment of incoming data, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Retail sales inched up 0.1% last month and advanced 2.1% since August 2023. Retail trade sales were up 0.1% in August and up 2.0% over the last 12 months. Nonstore (online) retailer sales were up 1.4% in August and rose 7.8% from last year, while food services and drinking places, which, while unchanged last month, were up 2.7% from August 2023.
In August, industrial production rose 0.8% after falling 0.9% in July. Manufacturing output increased 0.9% in August after decreasing 0.7% during the previous month. This pattern was due in part to a recovery in the index of motor vehicles and parts, which jumped nearly 10.0% in August after dropping roughly 9.0% in July. Manufacturing excluding motor vehicles and parts moved up 0.3% in August. Mining climbed 0.8%, while the utilities index was unchanged from July. Total industrial production in August was the same as its year-earlier level. Capacity utilization moved up to 78.0% in August, a rate that is 1.7% below its long-run average.
The number of issued residential building permits rose 4.9% in August. Single-family building permits increased 2.8% last month. However, since August 2023, residential building permits have fallen 6.5%. Housing starts in August advanced 9.6% and moved up 3.9% over the last 12 months. Single-family housing starts jumped 15.8% last month. Housing completions rose 9.2% in August and 30.2% above the August 2023 rate. Single-family housing completions declined 5.6% last month.
August saw sales of existing homes fall 2.5% from July. Year over year, existing-home sales were down 4.2%. According to the report released by the National Association of Realtors®, despite the recent retraction in sales, lower mortgage rates and increasing inventory should drive sales higher in future months. Housing inventory sat a 4.2-month supply in August, up from the July estimate of 4.1 months. The median existing-home price in August was $416,700, down from July’s price of $421,400 but up from the August 2023 value of $404,200. Single family home sales decreased 2.8% last month and declined 3.3% from the previous year. The median existing-single family home price was $422,100 in August, lower than the July price of $427,200 but well above the August 2023 price of $410,200. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.20% as of September 12, down from 6.35% one week ago and 7.18% one year ago.
The national average retail price for regular gasoline was $3.180 per gallon on September 16, $0.056 per gallon under the prior week’s price and $0.698 per gallon less than a year ago. Also, as of September 16, the East Coast price fell $0.064 to $3.085 per gallon; the Midwest price decreased $0.093 to $3.005 per gallon; the Gulf Coast price dipped $0.072 to $2.728 per gallon; the Rocky Mountain price rose $0.043 to $3.400 per gallon; and the West Coast price increased $0.032 to $4.136 per gallon.
For the week ended September 14, there were 219,000 new claims for unemployment insurance, a decrease of 12,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 7 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 7 was 1,829,000, a decrease of 14,000 from the previous week’s level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended August 31 were New Jersey (2.7%), Rhode Island (2.2%), California (2.0%), Puerto Rico (1.9%), Minnesota (1.7%), New York (1.7%), Washington (1.7%), Massachusetts (1.6%), Nevada (1.6%), Connecticut (1.5%), Illinois (1.5%), and Pennsylvania (1.5%). The largest increases in initial claims for unemployment insurance for the week ended September 7 were in Nebraska (+628), Wisconsin (+504), Iowa (+403), Virginia (+303), and Minnesota (+248), while the largest decreases were in New York (-2,878), California (-1,370), Ohio (-1,086), Michigan (-1,042), and Georgia (-891).

Eye on the Week Ahead

The final estimate for second quarter GDP is out this week. The prior estimate had the economy expanding at an annualized rate of 3.0%. The report on Personal Income and Outlays for August is also available this week. July saw personal income rise 0.3%, while personal consumption expenditures advanced 0.5%. Consumer prices rose 0.2% for July and 2.5% over the last 12 months ended in July.

What I’m Watching This Week – 16 September 2024

Published on September 15, 2024 by dredheadz

The Markets (as of market close September 13, 2024)

Equities rallied notably last week as investors awaited this week’s Federal Reserve meeting in anticipation of at least a 25.0-basis-point reduction in interest rates. Nine of the 11 market sectors ended last week higher, led by information technology. Only financials and energy lagged. The yield on 10-year Treasuries slipped to its lowest level since May 2023. Crude oil prices posted the first weekly advance in over a month. The dollar fell amid expectations of the aforementioned interest rate cut.

Investors took advantage of devalued stocks last Monday, sending values higher. Each of the benchmark indexes listed here gained ground, with the Dow, the NASDAQ, and the S&P 500 all climbing 1.2%. The Global Dow advanced 0.4%, while the Russell 2000 ticked up 0.3%. Ten-year Treasury yields continued the prior week’s tailspin, falling to 3.69%. Prices for crude oil gained 1.5% to close at $68.68 per barrel. The dollar and gold prices each increased 0.4%.

Equities closed mixed last Tuesday. For the second straight day, tech shares helped drive the NASDAQ (0.8%) and the S&P 500 (0.5%) higher, while bank and energy stocks dragged the Dow (-0.2%) lower. The Global Dow dipped 0.2%, while the small caps of the Russell 2000 ended the session flat. Investors were occupied with the presidential debate that evening, plus the Consumer Price Index report released on Wednesday. Bond prices continued to move higher, pulling yields down. Ten-year Treasury yields fell 5.1 basis points to 3.64%. Crude oil prices declined to $66.24 per barrel, the lowest price since 2021. For the last several months, oil prices have been impacted by weakening demand in China, coupled with OPEC’s 2024 and 2025 downwardly revised demand projections. The dollar edged up 0.1%, and gold prices rose 0.5%.

Stocks climbed higher last Wednesday following the presidential debate and a favorable CPI report. Once again, tech stocks led the charge, helping to propel each of the benchmark indexes listed here. The NASDAQ rose 2.2%, followed by the S&P 500 (1.1%), the Russell 2000 and the Dow (0.3%), and the Global Dow (0.1%). Crude oil prices rallied, climbing 2.2% to $67.19 per barrel. Yields on 10-year Treasuries ticked up to 3.65%. The dollar inched up 0.1%, while gold prices slipped 0.1%. Investors were encouraged by the CPI, which came in at an annual rate of 2.5%, the lowest since February 2021.

Wall Street enjoyed a second straight positive day of trading last Thursday. Stocks saw gains in most sectors, with technology, megacaps, and AI shares moving higher. The small caps of the Russell 2000 (1.2%) led the benchmark indexes, followed by the Global Dow (1.1%), the NASDAQ (1.0%), the S&P 500 (0.8%), and the Dow (0.6%). Ten-year Treasury yields inched up to 3.68%. Crude oil prices rose 2.8% to $69.18 per barrel. The dollar lost 0.4%, while gold prices advanced 1.8%.

Stocks closed the week higher last Friday. Each of the benchmark indexes posted solid gains, with the Russell 2000 leading the charge after climbing 2.5%. The Dow and the NASDAQ added 0.7%, the Global Dow rose 0.6%, and the S&P 500 advanced 0.5%. Yields on 10-year Treasuries fell to 3.65%. Crude oil prices ticked up 0.4% to $69.26 per barrel. The dollar dipped 0.2%, while gold prices rose 1.1%.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 9/13	Weekly Change	YTD Change
DJIA	37,689.54	40,345.41	41,393.78	2.60%	9.83%
NASDAQ	15,011.35	16,690.83	17,683.98	5.95%	17.80%
S&P 500	4,769.83	5,408.42	5,626.02	4.02%	17.95%
Russell 2000	2,027.07	2,091.41	2,182.49	4.35%	7.67%
Global Dow	4,355.28	4,782.56	4,882.10	2.08%	12.10%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	3.71%	3.65%	-6 bps	-21 bps
US Dollar-DXY	101.39	101.18	101.13	-0.05%	-0.26%
Crude Oil-CL=F	$71.30	$68.14	$69.26	1.64%	-2.86%
Gold-GC=F	$2,072.50	$2,524.00	$2,608.70	3.36%	25.87%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

The Consumer Price Index increased 0.2% in August and 2.5% over the last 12 months. This is the smallest 12-month increase since February 2021. Excluding food and energy prices, the CPI rose 0.3% last month (0.2% in July) and 3.2% since August 2023. The index for shelter rose 0.5% in August and was the main factor in the all items increase. The food index increased 0.1% in August after rising 0.2% in July. The energy index fell 0.8% over the month after being unchanged the preceding month. Over the last 12 months, prices for food rose 2.1%, energy fell 4.0%, and shelter rose 5.2%.
Prices at the producer level increased 0.2% in August, in line with expectations. Over the last 12 months, producer prices rose 1.7%. The August increase was attributable to a rise in prices for services. Nearly 60.0% of the increase in prices for services was due to a 0.3% advance in prices for services less trade, transportation, and warehousing. Prices for goods were unchanged last month. Goods prices less foods, energy, and trade services advanced 0.3% in August, the same as in July. For the 12 months ended in August, prices less foods, energy, and trade services moved up 3.3%.
According to the monthly Treasury statement of receipts and outlays, the August deficit was $380.00 billion, well above the $244.00 billion deficit for July and higher than the August 2023 surplus of $89.00 billion. With only one more month left in the fiscal year, the total deficit sat at $1,897.00 trillion, $373.00 billion above the deficit over the same period last fiscal year.
U.S. import prices declined 0.3% in August after increasing 0.1% in both June and July. The August monthly decline was the largest drop since December 2023, when prices fell 0.7%. Most of the August decrease in import prices is attributable to import fuel prices, which decreased 3.0% in August after increasing 1.1% the previous month. The August drop in fuel prices was the largest one-month decline since prices fell 8.0% in December 2023. Despite the August decline, import prices rose 0.8% over the past 12 months. Prices for U.S. exports fell 0.7% in August after advancing 0.5% the previous month. Lower prices for nonagricultural and agricultural exports each contributed to the decrease in export prices in August. Over the last 12 months, export prices declined 0.7%, the first year-over-year price drop since April 2024.
The national average retail price for regular gasoline was $3.236 per gallon on September 9, $0.053 per gallon under the prior week’s price and $0.586 per gallon less than a year ago. Also, as of September 9, the East Coast price fell $0.084 to $3.149 per gallon; the Midwest price decreased $0.073 to $3.098 per gallon; the Gulf Coast price dipped $0.044 to $2.800 per gallon; the Rocky Mountain price declined $0.044 to $3.357 per gallon; and the West Coast price rose $0.003 to $4.104 per gallon.
For the week ended September 7, there were 230,000 new claims for unemployment insurance, an increase of 2,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended August 31 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended August 31 was 1,850,000, an increase of 5,000 from the previous week’s level, which was revised up by 7,000. States and territories with the highest insured unemployment rates for the week ended August 24 were New Jersey (2.8%), Rhode Island (2.6%), California (2.1%), Puerto Rico (2.0%), Connecticut (1.9%), Minnesota (1.9%), Massachusetts (1.8%), New York (1.8%), Nevada (1.7%), Pennsylvania (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended August 31 were in Massachusetts (+2,230), Wisconsin (+820), Ohio (+806), Pennsylvania (+724), and Washington (+399), while the largest decreases were in Texas (-1,396), New York (-1,185), North Dakota (-919), California (-833), and Indiana (-796).

Eye on the Week Ahead

The focus will be squarely on the Federal Open Market Committee, which meets this week for the first time since July. Many observers predict that the Fed will cut rates by 50.0 basis points in light of inflation moving closer to the 2.0% Fed target and the slowdown in employment.

What I’m Watching This Week – 12 August 2024

Published on August 12, 2024 by dredheadz

The Markets (as of market close August 9, 2024)

Market volatility continued last week as stocks tumbled Monday and Wednesday, only to rebound at the end of last week, but not enough to avoid closing in the red for the second week in a row. Each of the benchmark indexes listed here lost value, with the small caps of the Russell 2000 falling the furthest. Despite the recent downturn, the indexes remain ahead year to date. Among the market sectors, only industrials and communication services closed higher, while materials and utilities shed the most value. Crude oil prices ended a losing streak, gaining nearly 4.0% last week. The dollar was flat, while gold prices slipped lower. Bond prices fluctuated throughout the week, ultimately settling lower, which drove yields higher.

The stock sell-off continued last Monday on increasing worries over a U.S. economic slowdown. Markets worldwide took a hit as investors feared that weak economic data and mediocre corporate earnings could be signs of a recession. The S&P 500 (-3.0%) and the Dow (-2.6%) had their worst day in over two years. The Nasdaq (-3.4%) endured its worst start to a month since 2008. The Global Dow (-3.4%) and the Russell 2000 (-3.3%) also slid lower. Ten-year Treasury yields headed to their lowest levels in a year after settling at 3.78%. Crude oil prices closed at $72.94 per barrel. The dollar slid 0.4%, while gold prices fell 0.8%.

The markets moved higher last Tuesday as investors took advantage of equities that had fallen in value. The Russell 2000 led the benchmark indexes, gaining 1.2%, followed by the Global Dow (1.1%), the Nasdaq (1.0%), and the Dow (0.8%). Bond prices fell, driving yields higher, with 10-year Treasuries gaining 10.3 basis points to close at 3.88%. Crude oil prices settled at $73.09 per barrel. The dollar edged higher, while gold prices fell 0.6%.

Tuesday’s market rebound proved to be short-lived as stocks trended lower by the close of trading last Wednesday. The Russell 2000 lost about 1.4% and the Nasdaq fell 1.1%. The S&P 500 declined 0.8% and the Dow dipped 0.6%. The Global Dow rose 0.5%. Ten-year Treasury yields marched toward 4.00%, ending the session just short at 3.96%. Crude oil prices advanced nearly 3.0% to $75.37 per barrel. The dollar gained 0.2%, while gold prices fell 0.2%.

In what turned into a roller coaster of a week, stocks jumped higher last Thursday, led by a 2.9% increase by the Nasdaq. The Russell 2000 advanced 2.4%, the S&P 500 gained 2.3%, the Dow rose 1.8%, and the Global Dow increased 1.0%. Weekly jobless claims unexpectedly fell 17,000 (see below), which brightened the mood of investors. Yields on 10-year Treasuries settled at 3.99% after gaining 0.3 basis points. Crude oil prices rose 1.1% to $76.04 per barrel. The dollar was unchanged. Gold prices gained 1.3%.

Large caps and tech shares rose higher, while small caps lagged to close out last week. There was no economic data released last Friday, so investors could focus on inflation data set to be released this week. The Global Dow led the indexes, gaining 0.6%, followed by the Nasdaq and the S&P 500, which both advanced 0.5%. The Dow inched up 0.1%, while the Russell 2000 fell 0.2%. The market sectors mostly advanced, with only industrials and materials falling lower. Ten-year Treasury yields fell to 3.94% as bond prices climbed higher. Crude oil prices advanced 1.0% to $76.97 per barrel. Gold prices edged up 0.3%, while the dollar inched lower.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 8/9	Weekly Change	YTD Change
DJIA	37,689.54	39,737.26	39,497.54	-0.60%	4.80%
Nasdaq	15,011.35	16,776.16	16,745.30	-0.18%	11.55%
S&P 500	4,769.83	5,346.56	5,344.16	-0.04%	12.04%
Russell 2000	2,027.07	2,109.31	2,080.92	-1.35%	2.66%
Global Dow	4,355.28	4,639.08	4,629.29	-0.21%	6.29%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	3.79%	3.94%	15 bps	8 bps
US Dollar-DXY	101.39	103.22	103.15	-0.07%	1.74%
Crude Oil-CL=F	$71.30	$74.11	$76.97	3.86%	7.95%
Gold-GC=F	$2,072.50	$2,480.00	$2,469.50	-0.42%	19.16%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

While the manufacturing sector may have slowed in July, the services sector saw an expansion of business activity last month. A rise in new orders has encouraged companies to take on extra staff. Input cost inflation accelerated, but the increased costs were passed on to consumers. The S&P Global US Services PMI® business Activity Index posted a reading of 55.0, signaling monthly expansion in services activity, which has continued for 18 months.
The goods and services trade deficit was $73.1 billion in June (the most recent data available), down $1.9 billion, or 2.5%, from the previous month. Exports, at $265.9 billion, increased by 1.5%, while imports, at $339.0 billion, advanced 0.6%. The June decrease in the goods and services deficit reflected a decrease in the goods deficit of $2.5 billion to $97.4 billion and a decrease in the services surplus of $0.6 billion to $24.2 billion. Year to date, the goods and services deficit increased $22.7 billion, or 5.6%, from the same period in 2023. Exports increased $58.0 billion, or 3.8%. Imports increased $80.7 billion, or 4.2%.
The national average retail price for regular gasoline was $3.448 per gallon on August 5, $0.036 per gallon under the prior week’s price and $0.380 per gallon less than a year ago. Also, as of August 5, the East Coast price fell $0.020 to $3.375 per gallon; the Midwest price decreased $0.048 to $3.428 per gallon; the Gulf Coast price dipped $0.084 to $3.010 per gallon; the Rocky Mountain price advanced $0.040 to $3.435 per gallon; and the West Coast price decreased $0.026 to $4.080 per gallon.
For the week ended August 3, there were 233,000 new claims for unemployment insurance, a decrease of 17,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended July 27 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended July 27 was 1,875,000, an increase of 6,000 from the previous week’s level, which was revised down by 8,000. This is the highest level for insured unemployment since November 27, 2021, when it was 1,878,000. States and territories with the highest insured unemployment rates for the week ended July 20 were New Jersey (2.8%), Rhode Island (2.6%), Puerto Rico (2.4%), California (2.3%), Minnesota (2.0%), Pennsylvania (1.9%), Connecticut (1.8%), Illinois (1.7%), Massachusetts (1.7%), New York (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended July 27 were in Michigan (+4,027), Missouri (+3,410), Massachusetts (+2,127), Virginia (+637), and Minnesota (+487), while the largest decreases were in Texas (-6,607), New York (-2,396), Ohio (-2,377), Florida (-1,587), and Tennessee (-1,488).

Eye on the Week Ahead

Inflation data for July is released this week. The Consumer Price Index dipped 0.1% in June, and investors will be looking for similar results in July. Prices producers paid, on the other hand, rose 0.2% in June.

What I’m Watching This Week – 29 July 2024

Published on July 29, 2024 by dredheadz

The Markets (as of market close July 26, 2024)

Stocks were mixed last week, with the Dow and the Russell 2000 adding value, while the Nasdaq, the S&P 500, and the Global Dow ended the week in the red. Tech shares took a hit as investors prepared for this week’s earnings data from four megacap giants. For the week, communication services, information technology, and energy closed lower among the market sectors. Health care and utilities posted the largest gains. The June personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation, was somewhat encouraging (see below). While the data is not favorable enough for the Fed to lower interest rates next week, it is trending in the right direction to lead to a possible interest rate cut in September. Crude oil prices declined on rising expectations of a cease-fire in Gaza and growing concerns on waning demand in China.

Tech shares rebounded from last week’s sell-off last Monday as traders assessed the political landscape after President Joe Biden ended his bid for re-election. The small caps of the Russell 2000 (1.7%) and the Nasdaq (1.6%) led the benchmark indexes listed here, while the S&P 500 advanced 1.1%. The Global Dow climbed 0.5%, and the Dow added 0.3%. Yields on 10-year Treasuries ticked up 2.1 basis points to 4.26%. Crude oil prices dipped to $79.95 per barrel. The dollar and gold prices moved marginally.

Last Tuesday saw stocks edge lower as investors awaited earnings data from major tech companies. Of the benchmark indexes listed here, only the Russell 2000 added value after gaining 1.0%. The remaining indexes dipped 0.2% or less. Ten-year Treasury yields slid to 4.23%. Crude oil prices continued to fall, dropping $1.13 to close at $77.27 per barrel. The dollar inched up 0.1%, while gold prices rose 0.6%.

Stocks fell last Wednesday after underwhelming megacap earnings led to a tech sell-off. The Nasdaq (-3.6%) suffered its worst single trading day since October 2022, while the S&P 500 (-2.3%) had its worst day since December 2022. The Russell 2000 fell 2.1%, the Dow dropped 1.3%, and the Global Dow lost 0.9%. Ten-year Treasury yields rose 4.7 basis points to 4.28%. Crude oil prices ended several days of declines, rising to $77.54 per barrel. The dollar dipped 0.1%, and gold prices fell 0.3%.

The Nasdaq (-0.9%) continued its tailspin last Thursday, while the small caps of the Russell 2000 gained 1.3%. The Dow ended the session up 0.2%. The Global Dow (-0.7%) and the S&P 500 (-0.5%) declined. Bond prices rose, pulling yields lower, with the 10-year note falling 3.0 basis points to 4.25%. Crude oil prices increased for the second straight day, settling at $78.12 per barrel. The dollar was flat, while gold prices slid 2.3%.

Stocks enjoyed a solid day last Friday, with each of the benchmark indexes posting gains. The Russell 2000 advanced 1.7%, followed by the Dow (1.6%), the S&P 500 (1.1%), the Nasdaq (1.0%), and the Global Dow (0.9%). Ten-year Treasury yields slipped to 4.20%. Crude oil prices fell to $76.81 per barrel. The dollar was flat, while gold prices rose 1.4%.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 7/26	Weekly Change	YTD Change
DJIA	37,689.54	40,287.53	40,589.34	0.75%	7.69%
Nasdaq	15,011.35	17,726.94	17,357.88	-2.08%	15.63%
S&P 500	4,769.83	5,505.00	5,459.10	-0.83%	14.45%
Russell 2000	2,027.07	2,184.35	2,260.07	3.47%	11.49%
Global Dow	4,355.28	4,760.35	4,753.88	-0.14%	9.15%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	4.23%	4.20%	-3 bps	34 bps
US Dollar-DXY	101.39	104.38	104.31	-0.07%	2.88%
Crude Oil-CL=F	$71.30	$80.26	$76.81	-4.30%	7.73%
Gold-GC=F	$2,072.50	$2,401.10	$2,385.40	-0.65%	15.10%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

According to the first, or advanced, estimate gross domestic product increased 2.8% in the second quarter. GDP rose 1.4% in the first quarter. The increase in GDP primarily reflected increases in consumer spending (2.3%), private inventory investment (8.4%), and nonresidential fixed investment (5.2%). Imports (6.9%), which are a subtraction in the calculation of GDP, increased. The personal consumption expenditures (PCE) price index, a measure of inflation, increased 2.6%, compared with an increase of 3.4% in the first quarter. Excluding food and energy prices, the PCE price index increased 2.9%, compared with an increase of 3.7% in the previous quarter.
The PCE price index inched up 0.1% in June and 2.5% over the last 12 months. In May, the PCE price index was unchanged, and the 12-month rate was 2.6%. Excluding food and energy, the PCE price index rose 0.2% in June and 2.6% for the year. Last month, both personal income and disposable (after-tax) personal income rose 0.2%. Personal consumption expenditures, a measure of consumer spending, advanced 0.3% in June.
New orders for manufactured durable goods decreased 6.6% in June following four consecutive monthly increases. Excluding transportation, new orders increased 0.5%. Excluding defense, new orders decreased 7.0%. Transportation equipment, down two of the last three months, drove the overall decrease, falling 20.5%. New orders for nondefense capital goods fell 22.4% last month, while new orders for defense capital goods increased 6.1%.
The international trade in goods deficit decreased 2.5% in June. Exports of goods in June rose 2.5%. Imports of goods in June inched up 0.7%.
Existing-home sales slumped in June, falling 5.4% below the May rate and 5.4% below the estimate from a year earlier. According to the National Association of Realtors®, homes are sitting on the market a bit longer, and sellers are receiving fewer offers. Total housing inventory was at a 4.1-month supply in June, up from 3.7 months in May. The last time unsold inventory posted a four-month supply was May 2020. The median existing-home sales price in June, at $426,900, reached a new record high, rising from $417,200 in May and well above the June 2023 price of $410,100. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.77% as of July 18. That’s down from 6.89% one week ago and 6.78% one year ago. Sales of existing single-family homes declined 5.1% from a month earlier and dropped 4.3% from June 2023.
Sales of new single-family homes fell 0.6% in June from a month earlier and were 7.4% below the June 2023 estimate. The median sales price of new houses sold in June 2024 was $417,300. The average sales price was $487,200. Inventory represented a supply of 9.3 months at the current sales rate. The median existing single-family home price in June was $432,700, up from May’s estimate of $422,400 and above the June 2023 price of $415,700.
The national average retail price for regular gasoline was $3.471 per gallon on July 22, $0.025 per gallon under the prior week’s price, and $0.125 per gallon less than a year ago. Also, as of July 22, the East Coast price fell $0.057 to $3.409 per gallon; the Midwest price increased $0.057 to $3.426 per gallon; the Gulf Coast price decreased $0.063 to $3.047 per gallon; the Rocky Mountain price declined $0.063 to $3.323 per gallon; and the West Coast price decreased $0.054 to $4.137 per gallon.
For the week ended July 20, there were 235,000 new claims for unemployment insurance, a decrease of 10,000 from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended July 13 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended July 13 was 1,851,000, a decrease of 9,000 from the previous week’s level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended July 6 were New Jersey (2.8%), Rhode Island (2.7%), Puerto Rico (2.4%), California (2.3%), Minnesota (2.2%), Massachusetts (1.9%), Pennsylvania (1.9%), Connecticut (1.8%), Washington (1.8%), Illinois (1.7%), Nevada (1.7%), and New York (1.7%). The largest increases in initial claims for unemployment insurance for the week ended July 13 were in Texas (+11,927), California (+6,284), Georgia (+3,101), Missouri (+2,999), and South Carolina (+2,413), while the largest decreases were in New Jersey (-1,532), Massachusetts (-1,531), Indiana (-1,407), Tennessee (-937), and Iowa (-853).

Eye on the Week Ahead

The Federal Open Market Committee meets this week, and while it is highly unlikely that the Fed will adjust interest rates at this time, the Committee might provide a more concrete indication as to when rates may be lowered. The employment data for July is also out this week. The labor sector has been steady during the period as the Fed tries to harness inflation.

What I’m Watching This Week – 22 July 2024

Published on July 21, 2024 by dredheadz

The Markets (as of market close July 19, 2024)

The market saw stocks come in with mixed returns. The Dow and the Russell 2000 advanced, while the Nasdaq, the S&P 500, and the Global Dow lost value. The Dow reached three new records during the week, while the Nasdaq and the S&P 500 posted their worst week since April. AI stocks led a downturn in tech shares as investors moved to small caps. The CrowdStrike outage impacted flights, banks, telecoms, and media companies worldwide. The market sectors ran the gambit of highs and lows, with energy (1.7%), financials (1.3%), and real estate (1.3%) climbing, while information technology (-4.6%) and communication services (-2.8%) declined. Ten-year Treasury yields rose 5.0 basis points. Crude oil prices declined on demand worries centered on China. The dollar inched up, while gold prices dipped lower.

Wall Street began last week on a high note, with each of the benchmark indexes listed here closing higher. The Dow reached a record high after climbing 0.5%. The Nasdaq gained 0.4%, the S&P 500 added 0.3%, while the big gainer was the Russell 2000, which advanced 1.8%. The Global Dow ticked down 0.2%. Ten-year Treasury yields rose 4.0 basis points to reach 4.81%. Crude oil prices fell $0.31 to settle at $81.90 per barrel. The dollar and gold prices rose 0.1% and 0.2%, respectively.

Stocks pushed higher for the second straight day last Tuesday. The small caps of the Russell 2000 gained 3.5%, followed by the Dow, which added 1.9% to record a new record. The S&P 500 rose 0.6%, the Global Dow advanced 0.5%, and the Nasdaq ticked up 0.2%. Industrial stocks made notable gains, while several companies reported better-than-expected second-quarter earnings. Yields on 10-year Treasuries slid to 4.16%. Crude oil prices fell again, closing at about $80.87 per barrel on weaker economic data from China. The dollar was unchanged, while gold prices rose 1.8%.

Last Wednesday saw the Dow (0.6%) continue its record streak, and the Global Dow ticked up 0.2%. The remaining benchmark indexes listed here declined, with the Nasdaq falling 2.8%, marking the worst day for that index since 2022. The S&P 500 dropped 1.4%, and the Russell 2000 lost 1.1%. Ten-year Treasury yields slid to 4.14%. Crude oil prices reversed a run of losses after gaining $2.14 to settle at $82.90 per barrel. The dollar fell 0.5%, and gold prices lost 0.3%.

Wednesday’s tech rout continued last Thursday. The small caps of the Russell 2000 lost 1.9%, while the Dow, which had a run of record highs, fell 1.3%. The S&P 500 lost 0.8%, while the Nasdaq and the Global Dow declined 0.7%. Investors took profits from tech shares in response to the potential negative impact export restrictions to China may have on the semiconductor market. Yields on 10-year Treasuries climbed to 4.18%. Crude oil prices slid to $82.29 per barrel. the dollar gained 0.42%, while gold prices fell 0.7%.

Last Friday saw stocks close mostly lower, likely impacted by the CrowdStrike IT outage, which caused major disruptions worldwide. The Global Dow fell 1.0%, while the Dow fell 0.9%. The Nasdaq (-0.8%) and the S&P 500 (-0.7%) lost value for the third straight day. The Russell 2000 dropped 0.6%. Ten-year Treasury yields added 5.0 basis points to close at 4.23%. Crude oil prices dipped $2.56 to settle at $80.26 per barrel. The dollar inched up 0.2%, while gold prices fell 2.3%.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 7/19	Weekly Change	YTD Change
DJIA	37,689.54	40,000.90	40,287.53	0.72%	6.89%
Nasdaq	15,011.35	18,398.45	17,726.94	-3.65%	18.09%
S&P 500	4,769.83	5,615.35	5,505.00	-1.97%	15.41%
Russell 2000	2,027.07	2,148.27	2,184.35	1.68%	7.76%
Global Dow	4,355.28	4,820.88	4,760.35	-1.26%	9.30%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	4.18%	4.23%	5 bps	37 bps
US Dollar-DXY	101.39	104.09	104.38	0.28%	2.95%
Crude Oil-CL=F	$71.30	$82.25	$80.26	-2.42%	12.57%
Gold-GC=F	$2,072.50	$2,416.40	$2,401.10	-0.63%	15.86%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

Retail sales in June were virtually unchanged from the previous month but were up 2.3% from a year earlier. Retail sales less motor vehicle and parts and gasoline stations rose 0.8% in June. Retail trade sales dipped 0.1% in June but rose 2.0% from June 2023. Nonstore retail sales rose 1.9% in June and 8.9% over the last 12 months.
Import prices were unchanged in June after falling 0.2% in May. Lower import fuel prices in June offset higher nonfuel prices. Import fuel prices decreased 1.0% in June. Import prices advanced 1.6% for the year ended in June, the largest 12-month increase since December 2022. Export prices decreased 0.5% last month following a 0.7% drop in May. The May and June declines were the first one-month decreases since December 2023. Export prices advanced 0.7% over the past 12 months.
The number of residential building permits issued in June rose 3.4% from the May rate but were 3.1% below the June 2023 estimate. Building permits for single-family homes declined 2.3% last month. Housing starts increased 3.0% in June, while falling 4.4% over the last 12 months. Single-family housing starts slid 2.2% below the May figure. Housing completions in June were 10.1% above the May estimate and 15.5% over the June 2023 rate. Single-family housing completions in June were 1.8% above the prior month’s estimate.
Industrial production rose 0.6% in June after advancing 0.9% in May. For the second quarter, industrial production increased 4.3%. Manufacturing output advanced 0.4% last month and 1.1% for the year. In June, mining rose 0.3%, and utilities increased 2.8%. Since June 2023, mining dipped 0.6%, while utilities advanced 7.9%. Total industrial production in June was 1.6% above its year-earlier level.
The national average retail price for regular gasoline was $3.496 per gallon on July 15, $0.007 per gallon above the prior week’s price but $0.063 per gallon less than a year ago. Also, as of July 15, the East Coast price rose $0.016 to $3.466 per gallon; the Midwest price increased $0.002 to $3.369 per gallon; the Gulf Coast price advanced $0.052 to $3.110 per gallon; the Rocky Mountain price decreased $0.045 to $3.486 per gallon; and the West Coast price declined $0.035 to $4.191 per gallon.
For the week ended July 13, there were 243,000 new claims for unemployment insurance, an increase of 20,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended July 6 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended July 6 was 1,867,000, an increase of 20,000 from the previous week’s level, which was revised down by 5,000. This is the highest level for insured unemployment since November 27, 2021, when it was 1,878,000. States and territories with the highest insured unemployment rates for the week ended June 29 were New Jersey (2.6%), Rhode Island (2.2%), California (2.1%), Minnesota (2.0%), Puerto Rico (2.0%), Pennsylvania (1.8%), Connecticut (1.7%), Massachusetts (1.7%), Washington (1.7%), Illinois (1.6%), Nevada (1.6%), and New York (1.6%). The largest increases in initial claims for unemployment insurance for the week ended July 6 were in Michigan (+10,578), New York (+5,247), Indiana (+2,835), Ohio (+1,604), and Tennessee (+1,166), while the largest decreases were in California (-5,672), New Jersey (-5,517), Georgia (-1,900), Texas (-1,809), and Minnesota (-1,078).

Eye on the Week Ahead

There’s plenty of market-moving economic data out this week. June reports on sales of both new and existing homes are available. May saw sales of new homes rise, while existing home sales declined. The initial report for second quarter gross domestic product follows a 1.4% advance in the first quarter. The report on personal income and expenditures is also available this week. The personal consumption expenditures price index, a measure of inflation preferred by the Federal Reserve, was flat in May.

What I’m Watching This Week – 15 July 2024

Published on July 14, 2024 by dredheadz

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

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

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

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

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

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

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

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 7/12	Weekly Change	YTD Change
DJIA	37,689.54	39,375.87	40,000.90	1.59%	6.13%
Nasdaq	15,011.35	18,352.76	18,398.45	0.25%	22.56%
S&P 500	4,769.83	5,567.19	5,615.35	0.87%	17.73%
Russell 2000	2,027.07	2,026.73	2,148.27	6.00%	5.98%
Global Dow	4,355.28	4,755.64	4,820.88	1.37%	10.69%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	4.27%	4.18%	-9 bps	32 bps
US Dollar-DXY	101.39	104.87	104.09	-0.74%	2.66%
Crude Oil-CL=F	$71.30	$83.25	$82.25	-1.20%	15.36%
Gold-GC=F	$2,072.50	$2,397.40	$2,416.40	0.79%	16.59%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

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

Eye on the Week Ahead

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