Stocks sold off sharply on Thursday over fears of a virus resurgence and plummeting bond yields but staged a sharp rally on Friday with indices mixed for the week.
OPEC+ met but was unable to reach an agreement on increasing production to handle the rebound in the economy. As such there was no increase in production which raised fears of further spikes in prices.
The Federal Reserve released minutes from their last meeting on Wednesday. While some FED officials are looking to reduce the size of bond purchases sooner than previously stated, others encouraged patience as hiring is weaker than expected.
On Friday, President Biden issued a sweeping executive order that intends to promote competitive markets and limit corporate dominance that hurts consumers, workers and smaller companies. While the order does not change existing antitrust laws it lays out a roadmap to federal agencies. The president of the Business Roundtable raised concerns that the efforts may undermine U.S. competitiveness. Much remains to be seen how this will play out.
Treasury yields fell with the 30-year bond yield closing at 1.991% and the 10-Year note closing at 1.360%. Crude oil fell to $74.63 a barrel and natural gas fell to $3.676 per MMBTUs. The U.S. dollar index fell to 92.10 and gold rose to $1808.60 an ounce.
In the economic numbers this week:
- The Labor Department reported:
- A seasonally adjusted 373,000 workers filed initial claims for unemployment in the week ending July 3rd, up 2,000 from a revised 375,000 the week before.
- The 4-week moving average of claims, designed to smooth out volatility, was 394,500.
- Continuing claims fell to 3.3MM in the week ending June 26th down from 3.5MM the week earlier.
- A broader measure of claims including extended benefits, pandemic assistance and other programs fell from 14.7MM to 14.2MM in the week ending June 19th.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude rose from 11.1MM BPD to 11.3MMBPD.
- Natural gas storage rose 15BN cubic feet and is below the average level at this time of year during the past five years.
- Baker Hughes reported the number of active oil rigs rose 2 to 378. The number of active natural gas rigs increased 2 to 101.
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Loren C. Rex, CFP®, MA Erik A Smith AIF®
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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.