U.S. and foreign stocks ended the week with substantial gains and emerging market stocks were up more sharply. The U.S. pulled out of the Iran deal but all other parties to the agreement plan to stay in. It is unknown at this point how much the sanctions will affect the Iranian economy and world oil prices. West Texas intermediate crude oil ended week over $70 per barrel due to several factors including a reduction in U.S. inventories, a large drop in Venezuelan production and the re-imposition of U.S. sanctions on Iran. We believe the risk to the U.S. of going it alone could damage the U.S.’s position in the world as other countries, namely China and Russia, are keen to build financial systems outside of U.S. control.
Inflation numbers moderated and this trend likely triggered the stock rally. The dollar fell as market participants expect a more moderate trajectory for U.S. interest rates,.
In the numbers this week:
- Canada lost 1,100 jobs in April following a gain of 32,300 in March. From a year ago, Canadian employment rose 1.5%. Wages were up 3.6% from a year ago.
- The Labor department reported:
- The producer-price index rose 0.1% in April. Excluding volatile food and energy prices rose 0.2%. From a year earlier producer prices rose 2.6%, less than the first three months of this year.
- The consumer-price index rose 0.2% in April. This follows a seasonally adjusted decline of 0.1% in March. Excluding volatile food and energy prices, consumer prices rose 0.1% in April. Over the past year the CPI has risen 2.5% and the core prices have risen 2.1%.
- Import prices rose 0.2% in April following a 0.2% decline in March. Excluding fuel import prices rose 0.3% in April following a 0.2% rise in March.
- First time claims for unemployment was unchanged at 211,000 in the prior week. The four week moving average of claims fell 5500 to 216,000, the lowest since December 1969 when the population and work force were much smaller.
- The Energy Information Administration weekly report is here wpsrsummary (8). Also the EIA reported:
- Weekly field production of crude oil rose 84 thousand barrels per day.
- Storage of Natural Gas rose 89BN cubic feet.
- According to Baker Hughes, In the past week the number of active oil rigs rose 10 to 844 and the number of active gas rigs rose 3 to 199.
- Factset reported that in the 1st quarter with 91% of S&P 500 companies reporting the blended earnings growth rate is 24.9% from a year ago.
Please call us if you have any questions.
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
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.