Most broad stock indexes ended the week slightly higher with the exception of the small cap Russell 2000. Both the White House and Democrats remain far apart on stimulus negotiations. Democrats have cut their original $3.5TN by 1/3 but want to retain $1TN for state and local governments with White House negotiators not willing to spend more than $150BN on state and local governments. It’s likely that there will be no major progress until after the Democratic and Republican conventions in the next two weeks.
Treasury yields rose sharply with the 30-year bond yield at 1.448% and the 10-Year note at 0.709%. Crude oil rose to $42.23 a barrel and natural gas rose to $2.345 per MMBTUs. The U.S. dollar index ended the week lower at 93.10 and gold prices retreated to $1953.70 an ounce.
In the economic numbers this week:
- The U.K. reported its gross domestic product fell 20.4% in the second quarter, more than any other developed country and more than twice as much as the U.S.
- China reported for July:
- The consumer price index rose 2.7% from a year ago.
- Producer prices fell 2.4% from a year ago, less than the 3% decline in June.
- Industrial output was 4.8% higher than a year earlier.
- Retail sales were down 1.1% from a year ago.
- The Federal Reserve reported that industrial production rose a seasonally adjusted 3% in the month of July. However, from July of last year, industrial production is down 8.2%. Manufacturing rose 3.4% mainly due to a 28.3% increase in automobiles and parts. Utility production rose 3.3% due to increased power for air conditioning. Mining, including oil and gas production rose 0.8%.
- The Commerce Department reported retail sales rose 1.2% in July for the third straight monthly increase.
- The Labor Department reported:
- 963,000 workers filed initial unemployment claims last week, the first week since March with initial claims below 1MM. However, this is above the pre-pandemic record of 695,0000.
- Continuing claims dropped to 15.5MM, down from a peak of nearly 25MM on May 9th.
- Producer prices rose 0.6% in July up from 0.1% in June.
- Consumer prices rose 0.6% in July following a 0.6% increase in June. Excluding volatile food and energy, prices rose 0.6%. A 5.6% increase in gasoline prices was offset by a 0.4% decrease in food prices. June consumer prices rose 0.6% following three months of declines.
- The EIA weekly oil report is here wpsrsummary . Also, the EIA reported in the past week:
- Field production of crude oil fell to 10.8MM barrels per day down from 11.0MM barrels in the prior week.
- Natural gas storage rose by 58BN cubic feet and is above the highest level at this time of year during the past five years.
- Baker Hughes reported the number of active oil rigs fell 4 to 172. The number of active natural gas rigs rose 1 to 70.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik A Smith AIF®
President Managing Partner
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. The Indices mentioned are unmanaged and cannot be invested into directly.
The information in this email is confidential and is intended solely for the addressee. If you are not the intended addressee and have received this email in error, please reply to the sender to inform them of this fact. We cannot accept trade orders through email. Important letters, email, or fax messages should be confirmed by calling 269-441-4091. This email service may not be monitored every day, or after normal business hours.