U.S. Stocks finished the week little changed while foreign stocks had modest gains. Retail sales and industrial production posted strong gains as did corporate earnings and jobless claims fell to the lowest since December 1969. However, volatile housing starts plunged in June. The markets seemed to be weighed down by the prospect of more tariffs from the Trump administration as threats emerged to place tariffs on over $500BN worth of Chinese imports. At the same time, Senator Orin Hatch, the chair of the Senate Finance Committee, urged the president to re-consider or he will move, “to curtail the Presidential trade authority.”
Treasury yields were little changed and most commodity indices declined slightly, as did the dollar.
In the numbers this week:
- The Federal Reserve reported that U.S. industrial production rose 0.6% in June, following a 0.5% decline in May. Mining output (including oil and gas) rose 1.2%, while manufacturing output rose 0.8% following a 1.0% decline in March. The May decline and June rebound were attributed to a fire resulting in the disruption of auto parts in May.
- Factset reported that with 17% of the S&P companies reporting 2nd quarter earnings, the blended earnings growth rate is 20.8% from the second quarter last year.
- The Commerce Department reported
- Retail sales rose 0.5% in June, while May’s increase was revised up to 1.3%. Vehicle sales and higher gas prices were attributed to the increase as was spending at health and personal-care stores. Department store sales fell 1.8%.
- Housing starts fell 12.3% in June following a 4.8% increases in May. Both houses and apartments starts declined and regionally on the only the Northeast saw a gain in single-family housing. Housing starts are volatile from month to month but have risen 7.8% in the first six months of the year from last year and single-family construction is close to the highest seen since the recession.
- Permits for new construction, a sign of future housing starts fell 2.2%.
- The Labor department reported
- First time claims for unemployment fell 8,000 to a seasonally adjusted 207,000 in the prior holiday week, the lowest since December 1969 when the population was much smaller. The four week moving average of claims fell 2750 to a seasonally adjusted 220,500. The week before last week was revised down from 232,000 to 215,000. The large revision was attributed to seasonal adjustments during the holiday week.
- The Energy Information Administration weekly is here wpsrsummary. Also the EIA reported
- U.S. Crude oil production rose to 11 million barrels per day.
- Storage of natural gas rose 46BN cubic feet.
- According to Baker Hughes, In the past week the number of active oil rigs was fell 5 to 858 and the number of active gas rigs fell 2 to 187.
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Loren C. Rex, CFP®, AIF®, MA Erik A Smith
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
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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.