U.S. Stocks were lower this past week. The Federal Reserve met and decided not to raise interest rates but also indicated caution about the upcoming vote in Britain on June 23rd about leaving the European Union. The FED also indicated a slower pace of rate increases with possibly only one quarter point increase this year. While markets prefer fewer rate increases the flip side is the accompanying outlook for slower growth. Treasury yields fell again with the 10 year hitting a multi-year low of 1.51% on Thursday. The dollar fell slightly. Crude oil was down for the week while gold was higher mainly on Brexit fears. Right now the opinion polls are mixed. However, if Britain votes to leave the EU this could be quite unsettling for the markets. May retail sales rose which confirms our opinion that the consumer will be the bright spot in the U.S. economy this year.
In economic news this week
- The Federal Reserve reported that industrial production fell a seasonally adjusted 0.4% in May. The decline was mainly due to a decline in auto production and utility demand. From a year ago industrial production was down 1.4%.
- The Commerce Department reported that retail sales rose 0.5% in May following a 1.3% rise in April. From a year ago retail sales were 2.5% higher. Excluding gasoline (which increased in price) retail sales rose 0.3%.
- The Labor Department reported
- The producer-price index for final demand rose a seasonally adjusted 0.4% in May after rising 0.2% in April. From a year ago May prices were up 0.1%.
- The consumer-price index rose 0.2% in May. Increases in gasoline and rents were attributed for the increase. Excluding food and energy prices also rose 0.2%.
- Import prices rose 1.4% in May. April’s prices were revised up to a 0.7% gain. The gains were attributed mainly to rising crude oil prices.
- First time claims for unemployment fell 13,000 to a seasonally adjusted 277,000 in the prior week. The four week moving average of claims fell 250 to 269,250.
- The U.S. Energy Information Administration reported in the prior week
- Crude oil inventories fell by 933,000 barrels.
- Crude oil production fell 29,000 to 8.72MM barrels.
- Gasoline fell 2.6MM barrels.
- The Commerce Department reported that housing starts fell 0.3% in May coming off a post financial crisis high in April. Single family housing starts rose 0.3% and multi-family housing starts fell 1.2%. New applications for building permits rose 0.7% indicating strengthening demand going forward. For the first five months of 2016 housing starts are up 14.5% from the same period last year. A shortage of buildable lots and skilled labor were attributed as a limit to building more homes.
- Baker Hughes reported that the US oil drilling rig drilling count rose 9 to 337 and the gas drilling rigs rose 1 to 86.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF® Erik Smith
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.