Tag: stocks

What I’m Watching This Week – 17 June 2024

Published on by dredheadz

The Markets (as of market close June 14, 2024)

U.S. stocks outpaced the rest of the world last week as global investors sought relief from the turmoil caused by European elections. Tech stocks carried the market as investors digested a pair of cooling inflation reports. The Nasdaq closed at record highs every day last week, and the S&P 500 also posted a solid gain, while the Russell 2000, the Dow, and the Global Dow all lost ground. The benchmark 10-year Treasury yield saw its largest weekly decline of the year. Crude oil prices surged, gold prices rose, and the dollar advanced for the fourth week in a row.

Stocks edged higher to begin last week. Big tech firms, particularly AI companies, helped support the market uptick. Bond yields rose, with 10-year Treasuries closing at 4.46% after gaining nearly 4.0 basis points. The Nasdaq led the benchmark indexes listed here after gaining 0.4%. The S&P 500 and the Russell 2000 added 0.3%. The Dow rose 0.2%, while the Global Dow dipped 0.2%. Crude oil prices closed at about $77.95 per barrel, up $2.42. The dollar and gold prices advanced. Utilities and energy led the market sectors, while financials and materials underperformed.

On Tuesday, the Nasdaq (0.9%) and the S&P 500 (0.3%) notched fresh records following the announcement by a major tech company of its AI platform. The remaining benchmark indexes closed in the red, led by the Global Dow (-0.8%), followed by the Russell 2000 (-0.4%) and the Dow (-0.3%). Bond prices jumped higher, pulling yields down, with 10-year Treasury yields falling 6.5 basis points to 4.40%. Crude oil prices moved up marginally to $77.86 per barrel. The dollar edged up 0.1% against a basket of currencies, while gold prices gained 0.2%.

Stocks surged again on Wednesday when the latest inflation data came in cooler than expected, and ended the day higher even though the Fed later dialed back its interest rate forecasts for the remainder of 2024 (see below). Most of the benchmark indexes listed here posted gains led by the Russell 2000 and the Nasdaq, which climbed 1.8% and 1.5%, respectively. The S&P 500 added about 0.9%, followed by the Global Dow (0.4%). The Dow edged down 0.1%. Ten-year Treasury yields fell 11 basis points, landing slightly below 4.3%, in response to the news on inflation and interest rates. Crude oil prices rose again, closing at $78.47 per barrel. The dollar fell 0.5%, while gold prices rose 0.6%.

Stock market performance was mixed last Thursday, after a gauge of wholesale prices unexpectedly reported the largest decline in seven months. Only the Nasdaq (0.3%) and the S&P 500 (0.2%) held on to small gains, while the small caps of the Russell 2000 (-0.9%), the Global Dow (-0.7%), and the Dow (-0.2%) all lost value. Information technology and real estate gained the most among the market sectors, while communication services and energy fell the furthest. Ten-year Treasury yields ticked down to 4.24%. Gold fell 1.5% and crude oil prices declined 0.5%, while the dollar advanced 0.5%.

On Friday, global equity markets reacted to growing anxiety over a political crisis in France, and a closely-watched gauge of U.S. consumer sentiment dove to a seven-month low. Four of the benchmark indexes closed the session lower, led by the Russell 2000, which fell 1.6%. The Global Dow declined 0.6%, while the S&P 500 and the Dow dipped 0.4% and 0.2%, respectively. The Nasdaq edged up 0.1%. Gold prices jumped 1.2% and the dollar rose, while 10-year Treasury yields dipped to 4.21%. Crude oil prices ticked up slightly.

Stock Market Indexes

Market/Index2023 ClosePrior WeekAs of 6/14Weekly ChangeYTD Change
DJIA37,689.5438,798.9938,559.22-0.62%2.31%
Nasdaq15,011.3517,133.1317,669.553.13%17.71%
S&P 5004,769.835,346.995,431.601.58%13.87%
Russell 20002,027.072,026.552,006.16-1.01%-1.03%
Global Dow4,355.284,719.764,632.94-1.84%6.38%
fed. funds target rate5.25%-5.50%5.25%-5.50%5.25%-5.50%0 bps0 bps
10-year Treasuries3.86%4.43%4.21%-22 bps35 bps
US Dollar-DXY101.39104.93105.510.55%4.06%
Crude Oil-CL=F$71.30$75.30$78.704.52%10.38%
Gold-GC=F$2,072.50$2,309.30$2346.501.61%13.22%

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 Reserve announced that the target range for the federal funds rate would remain at 5.25%-5.50%, a decision that was widely expected. Based on projections for interest rates by the end of next year, it now appears that Fed officials anticipate making just one rate cut of 0.25% later this year, followed by four more cuts in 2025.
  • The Consumer Price Index was unchanged in May, after increasing 0.3% in April. The index less food and energy rose 0.2% in May, after rising 0.3% in April. Prices for shelter continued to climb in May, more than offsetting a decline in gasoline prices. Prices for energy fell 2.0%, while prices for food rose 0.1%. The CPI advanced 3.3% for the 12 months ended in May, a slower pace than the 3.4% advance for the 12 months ended in April. Energy prices increased 3.7% for the 12 months ended in May, while food prices increased 2.1% over the last year. Prices less food and energy (core CPI) rose 3.4% for the year ended in May, down from 3.6% in April, and the smallest 12-month increase since 2021. Prices for motor vehicle insurance increased 20.3% over the last year, and a 5.4% rise in shelter prices accounted for over two thirds of the 12-month increase in core CPI.
  • The Producer Price Index, which measures prices producers receive for goods and services, decreased 0.2% in May after increasing 0.5% in April. This was the largest drop in wholesale prices since October. For the year ended in May, the PPI rose 2.2%, edging down from a 2.3% rise in April. Producer prices less foods, energy, and trade services were unchanged in May, following a 0.5% increase in April. For the 12 months ended in May, prices less foods, energy, and trade services rose 3.2%.
  • Prices for U.S. imports decreased 0.4% in May following a 0.9% increase the previous month. This was the first 1-month decline since December 2023. Lower fuel and nonfuel prices contributed to the overall decline. Prices for imports rose 1.1% for the year ended in May. Export prices fell 0.6% in May after rising 0.6% in April. Lower prices for nonagricultural exports in May more than offset higher agricultural prices. The price index for exports rose 0.6% over the past 12 months.
  • The federal deficit for May was $347.1 billion, well above the May 2023 deficit of $240.3 billion. In May, government receipts were $323.6 billion and expenditures totaled $670.8 billion. Through the first eight months of fiscal year 2024, the government deficit sits at $1.2 trillion, significantly lower than the $1.7 trillion deficit over the same period of the previous fiscal year.
  • The national average retail price for regular gasoline was $3.429 per gallon on June 10, $0.087 per gallon below the prior week’s price and $0.166 per gallon less than a year ago. Also, as of June 10, the East Coast price fell $0.073 to $3.370 per gallon; the Midwest price decreased $0.087 to $3.262 per gallon; the Gulf Coast price declined $0.094 to $2.951 per gallon; the Rocky Mountain price decreased $0.097 to $3.263 per gallon; and the West Coast price declined $0.116 to $4.371 per gallon.
  • For the week ended June 8, there were 242,000 new claims for unemployment insurance, an increase of 13,000 from the previous week’s unrevised level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended June 1 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended June 1 was 1,820,000, an increase of 30,000 from the previous week’s unrevised level. States and territories with the highest insured unemployment rates for the week ended May 25 were New Jersey (2.3%), California (2.1%), Washington (1.7%), Massachusetts (1.6%), Rhode Island (1.6%), Illinois (1.5%), New York (1.5%), Alaska (1.4%), Connecticut (1.4%), Nevada (1.4%), Pennsylvania (1.4%), and Puerto Rico (1.4%). The largest increases in initial claims for unemployment insurance for the week ended June 1 were in Minnesota (+2,788), California (+1,974), Ohio (+1,692), Pennsylvania (+1,566), and Florida (+784), while the largest decreases were in Michigan (-2,706), Texas (-1,822), Tennessee (-1,295), New York (-1,016), and Georgia (-809).

Eye on the Week Ahead

Several areas of the economy are highlighted this week, starting with the May retail sales report. Inflationary pressures at the retail level were somewhat muted in April. The Federal Reserve report on industrial production for May is also coming out. Industrial production was unchanged in April, although manufacturing output slowed. Lastly, the Census Bureau report on housing starts for May and data on existing home sales will be released. The number of issued building permits declined in April, while housing starts advanced. Sales of existing homes declined in April, although the median price for existing homes rose to over $400,000.

What I’m Watching This Week – 11 March 2024

Published on by dredheadz

The Markets (as of market close March 8, 2024)

Wall Street fell from record highs to close generally lower last week. A better-than-expected jobs report (see below) helped support the notion that the economy remains strong and that the Federal Reserve will likely cut interest rates, possibly after their June meeting. However, the unemployment rate ticked up for the first time in four months. The tech-heavy Nasdaq led the decline in the benchmark indexes for the week, with only the Global Dow and the Russell 2000 closing higher. Crude oil prices posted a weekly loss as China’s demand waned. Gold prices rallied to their largest weekly increase in five months, driven higher by optimism of mid-year interest rate cuts.

Stocks closed last Monday in the red. After reaching record highs the prior week, both the Nasdaq (-0.4%) and the S&P 500 (-0.1%) fell. The Dow lost 0.3%, while the Russell 2000 slipped 0.1%. The Global Dow was flat. Ten-year Treasury yields inched up to 4.21%. Crude oil prices settled at about $78.72 per barrel after declining $1.25. The dollar ended the session where it began, while gold prices added 1.4%.

Wall Street saw equities extend their losses last Tuesday, driven by a widespread sell-off of tech shares. The Nasdaq fell 1.7% to lead the downturn, followed by the Russell 2000, Dow, and the S&P 500 (-1.0%). The Global Dow dipped 0.3%. The yield on 10-year Treasuries fell 8.2 basis points to 4.13%. Crude oil prices also continued to decline, falling to $78.14 per barrel. The dollar was flat, while gold prices rose 0.5%.

Last Wednesday saw stocks rebound after Fed Chair Jerome Powell maintained his stance that interest rates are likely to be cut sometime this year. The Russell 2000 and the Global Dow gained 0.7%, followed by the Nasdaq (0.6%), the S&P 500 (0.5%), and the Dow (0.2%). Ten-year Treasury yields slipped 3.3 basis points to close at 4.10%. Crude oil prices gained nearly $1.00 to settle at $79.13 per barrel. The dollar fell 0.4%, while gold prices rose 0.6%.

Stocks advanced for the second straight day last Thursday, with both the Nasdaq and the S&P 500 hitting new record highs. Tech shares fueled much of the rally, particularly AI stocks. By the close of trading, the Nasdaq rose 1.5%, the S&P 500 climbed 1.0%, the Russell 2000 gained 0.8%, the Global Dow advanced 0.7%, and the Dow increased 0.3%. Ten-year Treasury yields ticked lower to close at 4.09%. Crude oil prices closed at $78.89 per barrel. The dollar continued to slide, falling 0.5%. Gold prices advanced for the fourth straight day.

Last Friday’s volatile session saw stocks finish lower as a rally in chip stocks lost steam. Each of the benchmark indexes finished the session lower, with the Nasdaq falling the furthest (-2.3%), followed by the S&P 500 (-0.7%), the Dow (-0.2%), and the Russell 2000 (-0.1%). the Global Dow ended the session where it began. Ten-year Treasury yields were flat, while crude oil prices slipped 1.4%. The dollar lost less than 0.1%, while gold prices rose 0.9%.

Stock Market Indexes

Market/Index2023 ClosePrior WeekAs of 3/8Weekly ChangeYTD Change
DJIA37,689.5439,087.3838,722.69-0.93%2.74%
Nasdaq15,011.3516,274.9416,085.11-1.17%7.15%
S&P 5004,769.835,137.085,123.69-0.26%7.42%
Russell 20002,027.072,076.392,082.710.30%2.74%
Global Dow4,355.284,539.464,592.171.16%5.44%
fed. funds target rate5.25%-5.50%5.25%-5.50%5.25%-5.50%0 bps0 bps
10-year Treasuries3.86%4.18%4.08%-10 bps22 bps
US Dollar-DXY101.39103.88102.75-1.09%1.34%
Crude Oil-CL=F$71.30$79.80$77.88-2.41%9.23%
Gold-GC=F$2,072.50$2,092.40$2,184.804.42%5.42%

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

Last Week’s Economic News

  • Employment rose by 275,000 in February. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing. The change in employment for December was revised down by 43,000, and the change for January was revised down by 124,000. With these revisions, employment in December and January combined was 167,000 lower than previously reported. In February, the unemployment rate rose by 0.2 percentage point to 3.9%, and the number of unemployed people increased by 334,000 to 6.5 million. A year earlier, the jobless rate was 3.6%, and the number of unemployed people was 6.0 million. In February, the labor force participation rate was 62.5% for the third consecutive month, while the employment-population ratio decreased 0.1 percentage point to 60.1%. In February, average hourly earnings edged up by $0.05 to $34.57, following an increase of $0.18 in January. Average hourly earnings were up by 0.1% in February and 4.3% over the last 12 months. In February, the average workweek edged up by 0.1 hour to 34.3 hours, following a decline of 0.2 hour in January.
  • According to the latest Job Openings and Labor Turnover Survey, the number of job openings in January, at 8.9 million, was little changed from the previous month. The total number of hires, at 5.7 million, fell by 100,000, while total separations, at 5.3 million, decreased by 78,000.
  • Purchasing manager survey respondents noted a solid performance in February, according to the latest purchasing managers’ index from S&P Global. Output rose for the 13th consecutive month, while new business rose for the fourth straight month in February. Costs to service providers eased to the slowest pace since October 2020.
  • The international trade in goods and services deficit in January was $67.4 billion, up $3.3 billion, or 5.1% from the December deficit. January exports were $257.2 billion, $0.3 billion, or 0.1% more than December exports. January imports were $324.6 billion, $3.6 billion, or 1.1% more than December imports. Since January 2023, the goods and services deficit decreased $2.9 billion, or 4.1%. Exports decreased $1.0 billion, or 0.4%, while imports fell $3.9 billion, or 1.2%.
  • The national average retail price for regular gasoline was $3.350 per gallon on March 4, $0.101 per gallon more than the prior week’s price but $0.039 per gallon less than a year ago. Also, as of March 4, the East Coast price increased $0.036 to $3.240 per gallon; the Midwest price rose $0.171 to $3.269 per gallon; the Gulf Coast price climbed $0.104 to $2.949 per gallon; the Rocky Mountain price advanced $0.032 to $3.014 per gallon; and the West Coast price increased $0.147 to $4.229 per gallon.
  • For the week ended March 2, there were 217,000 new claims for unemployment insurance, unchanged 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 February 24 was 1.3%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended February 24 was 1,906,000, an increase of 8,000 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 February 17 were New Jersey (2.8%), Rhode Island (2.7%), Minnesota (2.5%), California (2.4%), Massachusetts (2.4%), Illinois (2.2%), Montana (2.1%), Alaska (2.0%), New York (2.0%), and Pennsylvania (2.0%). The largest increases in initial claims for unemployment insurance for the week ended February 24 were in Massachusetts (+4,032), Rhode Island (+1,936), Connecticut (+429), California (+311), and Missouri (+310), while the largest decreases were in Oklahoma (-1,943), Texas (-1,121), Michigan (-980), Oregon (-823), and Florida (-752).

Eye on the Week Ahead

Inflation data for February is available this week with the Consumer Price Index, import and export prices, and the Producer Price Index. January saw prices increase across the board, although 12-month data showed prices either decreased or were unchanged.

What I’m Watching This Week – 20 February 2024

Published on by dredheadz

The Markets (as of market close February 16, 2024)

Rising inflation heightened investor concerns that the Federal Reserve may not consider lowering interest rates during the first half of the year. Among the benchmark indexes listed here, only the small caps of the Russell 2000 and the Global Dow were able to gain ground. The Dow snapped a five-week winning streak, while the Nasdaq and the S&P 500 also finished the week lower. With the stock market closed on Monday for President’s Day, investors will have to wait a little longer to try to begin another rally. Materials, utilities, financials, and industrials were better-performing sectors, while information technology and communication services lagged. Ten-year Treasury yields rose for the second straight week. Crude oil prices climbed higher, while the national average for regular gasoline jumped to a two-month high.

Last week began with what turned out to be a choppy day of trading. The Dow added 0.3% to hit a fresh record last Monday. The tech-heavy Nasdaq fell 0.3% and the S&P 500 dipped 0.1%. The small caps of the Russell 2000 jumped 1.8%, while the Global Dow gained 0.4%. Ten-year Treasury yields closed at 4.17%. Gold prices rose $0.17 to $77.01 per barrel. The dollar was flat while gold prices fell 0.2%.

Stocks closed sharply lower last Tuesday following a hotter-than-expected Consumer Price Index (see below). After reaching record highs, each of the benchmark indexes listed here declined. The small caps of the Russell 2000 fell 4.0%, the tech-heavy Nasdaq lost 1.8%, the Dow and the S&P 500 declined 1.4%, while the Global Dow dropped 0.9%. The latest inflation data probably prompted investors to reconsider their expectations of a rate cut by the Federal Reserve in March or May. Yields on 10-year Treasuries jumped 14.4 basis points to 4.31%. Crude oil prices advanced, gaining $0.88 to $77.80 per barrel. The dollar rose 0.7%, while gold prices decreased 1.3%.

Last Wednesday saw stocks rebound from the prior day’s selloff. The Russell 2000 gained 2.4%, followed by the Nasdaq, which added 1.3%. The S&P 500 rose 1.0%, while the Dow and the Global Dow advanced 0.4%. Ten-year Treasury yields declined 4.9 basis points to 4.26%. Crude oil prices fell $1.37 to $76.60 per barrel, The dollar and gold prices slid lower.

Stocks continued to climb higher last Thursday led by the Russell 2000, which gained 2.5%. Investors assessed a slew of favorable corporate earnings centered around information technology, consumer spending, and energy. The Dow and the Global Dow added 0.9%, while the S&P 500 rose 0.6% and the Nasdaq advanced 0.3%. Ten-year Treasury yields dipped to 4.24%. Crude oil prices rose to $78.20 per barrel, up about $1.56 from the prior day’s close. The dollar fell 0.4%, while gold prices rose 0.6%.

Most of the benchmark indexes listed here lost ground last Friday. The Global Dow proved to be the exception, eking out a 0.1% gain. The Russell 2000 fell 1.4%, the Nasdaq dropped 0.8%, the S&P 500 declined 0.5%, and the Dow slipped 0.4%. Ten-year Treasury yields added 5.5 basis points to close at 4.29%. Crude oil prices gained 1.5% to settle just shy of $80.00 per barrel. The dollar was flat, while gold prices rose 0.5%.

Stock Market Indexes

Market/Index2023 ClosePrior WeekAs of 2/16Weekly ChangeYTD Change
DJIA37,689.5438,671.6938,627.99-0.11%2.49%
Nasdaq15,011.3515,990.6615,775.65-1.34%5.09%
S&P 5004,769.835,026.615,005.57-0.42%4.94%
Russell 20002,027.072,009.992,032.741.13%0.28%
Global Dow4,355.284,406.424,443.560.84%2.03%
fed. funds target rate5.25%-5.50%5.25%-5.50%5.25%-5.50%0 bps0 bps
10-year Treasuries3.86%4.18%4.29%11 bps43 bps
US Dollar-DXY101.39104.06104.280.21%2.85%
Crude Oil-CL=F$71.30$76.55$79.253.53%11.15%
Gold-GC=F$2,072.50$2,039.50$2,025.30-0.70%-2.28%

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 0.3% in January, exceeding expectations with the largest monthly gain since September 2023. Core prices, excluding food and energy, rose 0.4% in January, 0.1 percentage point higher than the December increase. Despite the January increase, the 12-month rate declined from 3.4% to 3.1%, while core prices were unchanged at 3.9%. Prices for shelter, which rose 0.6% last month, contributed more than two thirds of the overall monthly increase. Food prices advanced 0.4%, while energy prices fell 0.9%. In addition to food and shelter, other areas which saw prices increase included motor vehicle insurance and medical care. Prices for used cars and trucks and for apparel were among those that decreased over the month. For the 12 months ended in January, prices for food rose 2.6% and shelter prices advanced 6.0%. Prices for energy declined 4.6%.
  • The Producer Price Index rose 0.3% in January after falling 0.1% in December. Since January 2023, producer prices have risen 0.9%. Last month, producer prices for services advanced 0.6%, the largest increase since July 2023. Prices for goods declined 0.2%. Producer prices less foods, energy, and trade services rose 0.6% in January, the largest advance since moving up 0.6% in January 2023. For the 12 months ended January 2024, prices for final demand less foods, energy, and trade services increased 2.6%.
  • Retail sales declined 0.8% in January from the previous month but were up 0.6% from January 2023. Retail trade sales were down 1.1% from December 2023 and 0.2% below sales from a year earlier. Nonstore (online) retail sales were up 6.4% from last year, while sales at food services and drinking places were up 6.3% from January 2023.
  • Both import prices and export prices rose 0.8% in January after declining 0.7% in December. The January increase in import prices was the first monthly advance since September 2023 and was the largest monthly increase since March 2022. Despite the January increase, import prices fell 1.3% over the past year and have not risen on a 12-month basis since January 2023. Import fuel prices increased 1.2% in January following declines of 7.7% in December and 6.3% in November. The January increase in export prices was also the first monthly increase since September 2023. Over the past 12 months ended in January, export prices decreased 2.4%.
  • Industrial production edged down 0.1% in January after recording no change in December. Manufacturing output declined 0.5% last month after increasing in both November and December. Mining fell 2.3%, while an increased demand for heating drove utilities up 6.0%. Total industrial production was identical to its year-earlier level. Within the manufacturing sector, durables edged up 0.1% in January, which was more than offset by manufacturing of nondurables, which fell 1.1%.
  • The Treasury budget deficit was $22.0 billion in January, down from December’s $129.4 billion. January receipts were $477.3 billion, while expenditures were $499.3 billion. Through the first four months of the current fiscal year, the deficit sat at $531.9 billion, about $72.0 billion above the deficit over the same period last fiscal year. Last month, individual income taxes ($283.0 billion) contributed more than half of the total receipts, while Social Security and Medicare payments ($204.0 billion) represented the largest expenditures.
  • The number of building permits issued for residential construction decreased 1.5% in January from December but were 8.6% above the January 2023 figure. Building permits for single-family residential construction increased 1.6% last month. Housing starts fell 14.8% in January and were 0.7% under the January 2023 rate. Single-family housing starts also declined, falling 4.7%. January home completions were 8.1% below the December estimate but 2.8% above the rate from a year earlier.
  • The national average retail price for regular gasoline was $3.192 per gallon on February 12, $0.056 per gallon higher than the prior week’s price but $0.198 per gallon less than a year ago. Also, as of February 12, the East Coast price increased $0.034 to $3.151 per gallon; the Midwest price rose $0.133 to $3.044 per gallon; the Gulf Coast price decreased $0.014 to $2.807 per gallon; the Rocky Mountain price advanced $0.045 to $2.791 per gallon; and the West Coast price increased $0.028 to $4.011 per gallon.
  • For the week ended February 10, there were 212,000 new claims for unemployment insurance, a decrease of 8,000 from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended February 3 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 February 3 was 1,895,000, an increase of 30,000 from the previous week’s level, which was revised down by 6,000. States and territories with the highest insured unemployment rates for the week ended January 27 were New Jersey (2.8%), Rhode Island (2.7%), Minnesota (2.5%), Massachusetts (2.4%), California (2.3%), Illinois (2.3%), Montana (2.2%), Alaska (2.1%), Connecticut (2.1%), Pennsylvania (2.1%), and Washington (2.1%). The largest increases in initial claims for unemployment insurance for the week ended February 3 were in Missouri (+1,921), Texas (+1,514), Colorado (+783), Illinois (+612), and Florida (+399), while the largest decreases were in Oregon (-4,561), California (-4,312), Ohio (-4,090), New York (-3,165), and Pennsylvania (-3,075).

Eye on the Week Ahead

There’s very little in terms of market-moving economic data being released this week. The Federal Open Market Committee releases the minutes from its last meeting, which might provide some insight as to the direction the Committee may be headed with respect to interest rates. Also out this week is the January data on sales of existing homes. Sales declined 1.0% in December and 6.2% year over year.

What I’m Watching This Week – 18 December 2023

Published on by dredheadz

The Markets (as of market close December 15, 2023)

Last week saw stocks rally after the Federal Reserve policy statement released last Wednesday suggested no more interest rate hikes, while predicting rate cuts in 2024 (see below). Despite losing momentum at the end of the week, stocks enjoyed their seventh consecutive week of gains, with the S&P 500 marking its longest winning streak since 2017 and the Dow’s longest since 2018. Each of the market sectors ended the week higher, led by real estate, consumer discretionary, materials, and financials. Bond yields continued to be volatile, dropping 32.0 basis points as investors tried to determine the direction interest rates will take. Crude oil prices ended a stretch of six weeks of losses. The dollar registered its largest weekly drop in a month against a basket of currencies.

Wall Street began last week on a positive note as investors awaited the upcoming release of the latest inflation data and the Federal Reserve meeting. Each of the benchmark indexes listed here closed higher last Monday, led by the Dow, the S&P 500, and the Global Dow, which each rose 0.4%. The Russell 2000 and the Nasdaq inched up 0.2%. Ten-year Treasury yields slipped minimally to 4.23%. Crude oil prices rose 0.3% to $71.45 per barrel. The dollar ticked higher, while gold prices fell nearly 1.0%.

Markets closed generally higher last Tuesday. The Consumer Price Index (see below) showed inflation held steady with the Federal Reserve’s final meeting of 2023 on tap for Wednesday. The Dow and the S&P 500 gained 0.5%, while the Nasdaq added 0.7%, with all three indexes closing at their highest levels since January 2022. The Global Dow ticked up 0.2%, while the Russell 2000 dipped 0.1%. Crude oil prices gave back recent gains, falling 3.6% to $68.73 per barrel. Yields on 10-year Treasuries fell 3.3% to 4.20%. The dollar fell 0.3%, while gold prices rose less than 0.1%.

Wall Street reacted favorably to the outcome of the Federal Reserve’s meeting last Wednesday (see below) as stocks climbed to record highs. Each of the benchmark indexes listed here posted solid gains led by the Russell 2000, which climbed 3.5%. The Dow, the Nasdaq, and the S&P 500 each rose 1.4%, while the Global Dow added 1.1%. Ten-year Treasury yields fell to 4.03%, the lowest rate since August, while two-year yields tumbled 30.0 basis points to 4.43%, all in response to the Fed’s statement. Crude oil prices swung higher, closing at $69.74 per barrel after gaining 1.65%. The dollar fell 0.9%, while gold prices rose 2.3%.

Stocks continued to climb higher last Thursday as investors rode momentum from the Fed’s aforementioned policy statement. The Dow jumped 0.4% to hit another record high, while the S&P 500 (0.3%) and the Nasdaq (0.2%) notched gains. But the interest-sensitive small caps of the Russell 2000 posted notable gains after advancing 2.7%, while the Global Dow rose 1.3%. Ten-year Treasuries dipped to 3.93%, falling below 4.0% for the first time since August. Crude oil prices rose 3.2% to $71.70 per barrel. The dollar declined 0.9%, while gold prices climbed 2.7%.

Stocks cooled to end last week. Of the benchmark indexes listed here, only the Nasdaq (0.4%) and the Dow (0.2%) advanced. The Russell 2000 lost 0.7%, the Global Dow fell 0.2%, while the S&P 500 was flat. Crude oil prices rose for the fourth day out of five, gaining 0.7%. The dollar ended a three-day losing streak after gaining 0.6%. Gold prices dipped 0.6%.

Stock Market Indexes

Market/Index2022 ClosePrior WeekAs of 12/15Weekly ChangeYTD Change
DJIA33,147.2536,247.8737,305.162.92%12.54%
Nasdaq10,466.4814,403.9714,813.922.85%41.54%
S&P 5003,839.504,604.374,719.192.49%22.91%
Russell 20001,761.251,880.821,985.135.55%12.71%
Global Dow3,702.714,191.864,285.042.22%15.73%
Fed. Funds target rate4.25%-4.50%5.25%-5.50%5.25%-5.50%0 bps100 bps
10-year Treasuries3.87%4.24%3.92%-32 bps5 bps
US Dollar-DXY103.48103.98102.61-1.32%-0.84%
Crude Oil-CL=F$80.41$71.25$71.620.52%-10.93%
Gold-GC=F$1,829.70$2,019.40$2,033.400.69%11.13%

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 Reserve decided to maintain the target range for the federal funds rate at 5.25%-5.50% for the third straight meeting. Based on Fed projections for interest rates by the end of next year, it appears the Fed anticipates making three rate cuts of 0.25% each over the course of 2024.
  • The Consumer Price Index increased 0.1% in November, after being unchanged in October. The index less food and energy rose 0.3% in November, after rising 0.2% in October. Prices for shelter continued to rise in November, offsetting a decline in gasoline prices. Prices for energy fell 2.3%, while prices for food increased 0.2%. The CPI rose 3.1% for the 12 months ended in November, a smaller increase than the 3.2% advance for the 12 months ended in October. Prices less food and energy rose 4.0% for the year ended in November, the same increase as for the 12 months ended in October. Energy prices decreased 5.4% for the 12 months ended in November, while food prices increased 2.9% over the last year.
  • The Producer Price Index, which measures prices producers receive for goods and services, was unchanged in November after declining 0.4% in October. Last month, prices for both goods and services were unchanged. For the year ended in November, the PPI increased 0.9%. Producer prices less foods, energy, and trade services edged up 0.1% in November, the sixth consecutive monthly advance. For the 12 months ended in November, prices less foods, energy, and trade services rose 2.5%.
  • Retail sales rose by 0.3% in November and were up 4.1% from November 2022. Retail trade sales rose 0.1% last month and 3.1% from November 2022.
  • Prices for imports decreased 0.4% in November following a 0.6% decline the previous month. The November decline was the first one-month declines since June 2023. Lower fuel prices in November more than offset an increase in nonfuel prices. Prices for imports fell 1.4% for the year ended in November. Export prices fell 0.9% for the second consecutive month in November. Lower prices for nonagricultural exports in November more than offset higher agricultural prices. The price index for exports also declined over the past 12 months, decreasing 5.2% from November 2022.
  • Industrial production increased 0.2% in November. Manufacturing output jumped 0.3%, largely due to a 7.1% increase in motor vehicles and parts production following the resolution of strikes at several major automakers. Excluding motor vehicles and parts, manufacturing fell 0.2%. The output of utilities moved down 0.4%, and the output of mines moved up 0.3%. Total industrial production in November was 0.4% below its year-earlier level.
  • The November deficit for the federal government was $314.0 billion, $247.5 billion above the October deficit and $65.5 billion higher than the November 2022 deficit. Total government receipts in November were $274.8 billion and government outlays totaled $588.8 billion. Through the first two months of fiscal year 2024, the government budget deficit sat at $380.6 billion compared to $336.4 billion over the same period last fiscal year.
  • The national average retail price for regular gasoline was $3.126 per gallon on December 11, $0.095 per gallon lower than the prior week’s price and $0.103 less than a year ago. Also, as of December 11, the East Coast price decreased $0.083 to $3.123 per gallon; the Midwest price fell $0.090 to $2.901 per gallon; the Gulf Coast price declined $0.116 to $2.622 per gallon; the Rocky Mountain price dropped $0.116 to $2.899 per gallon; and the West Coast price decreased $0.111 to $4.141 per gallon.
  • For the week ended December 9, there were 202,000 new claims for unemployment insurance, a decrease of 19,000 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 December 2 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 December 2 was 1,876,000, an increase of 20,000 from the previous week’s level, which was revised down by 5,000. States and territories with the highest insured unemployment rates for the week ended November 25 were New Jersey (2.4%), California (2.3%), Alaska (2.2%), Puerto Rico (1.9%), Washington (1.9%), Hawaii (1.8%), Massachusetts (1.8%), Minnesota (1.8%), New York (1.8%), and Oregon (1.8%). The largest increases in initial claims for unemployment insurance for the week ended December 2 were in California (+13,478), New York (+9,073), Texas (+8,321), Georgia (+6,728), and Oregon (+5,406), while the largest decreases were in Kansas (-893), Vermont (-14), and Delaware (-14).

Eye on the Week Ahead

The final estimate of third-quarter gross domestic product is available this week. The second estimate had the economy accelerating at an annualized rate of 5.2%. The November data on personal income and outlays is also out this week. Consumer spending rose 0.2% in October, while the personal consumption expenditures price index, a measure of inflation, was flat. Consumer prices continue to inch lower, although they remain above the Federal Reserve’s target of 2.0%.