The S&P 500 was nearly unchanged for the week but the week but the Nasdaq declined on further selling of technology shares. Global markets were down slightly.
The Federal Reserve boosted short term rates to a range of 1.00% to 1.25% and laid out a plan to gradually reduce the size of its balance sheet later this year by not reinvesting all bonds that mature. This is much different than what we’ve seen elsewhere in the world as both Russia and Iceland cut interest rates .25%, the U.K. is continuing its bond purchases and left its short-term rate at .25%. China, Chile and Japan also left their interest rates unchanged and Japan is continuing its asset purchases. It will be interesting to see how long this divergence in monetary policy will last.
Despite the FED’s actions the 10-year treasury rate fell from 2.2% to 2.16%. The dollar was mostly unchanged and commodities, particularly oil, fell.
President Trump signed an executive order to more than double federal support for apprenticeship programs as a way to help train workers for the skills companies need.
In the numbers, this week:
- The Labor Department reported first time claims for unemployment fell 8,000 to a seasonally adjusted 237,000. The four-week moving average of claims rose 1,000 to 243,000
- The Energy Information Administration’s Weekly Petroleum Data report is here: wpsrsummary (16).
- The Energy Information Administration reported
- Weekly field production of crude oil fell 12,000 barrels per day in the prior week.
- Natural gas in storage rose 78 Bcf last week from the prior week.
- Baker Hughes reported that oil drilling rigs increased by 6 to 747. Gas drilling rigs rose 1 to 186.
- The Commerce Department reported:
- Retail sales fell 0.3% in May due to fewer auto purchases and less spending on gasoline due to lower prices.
- Consumer prices declined 0.1% in May. Excluding volatile food and energy prices rose 0.1%. From a year ago the CPI rose 1.9% or 1.7% excluding food and energy.
- Housing starts fell 5.5% in May, the third month in a row. Building permits, a measure of future housing starts, fell 4.9% in May. Multi-family starts were down 10.4% and single-family starts were down 1.9%. These numbers can be quite volatile from month to month. Looking at the first five months of the year housing starts were up 3.2% from a year ago and permits were up 5.5%.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA 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.