Stock indices ended the week modestly higher despite a selloff on Thursday due to events in Afghanistan. The FED completed it’s annual symposium, held virtually again this year. Chairman Powell reiterated that the inflation surge is expected to be temporary and said he expects the FED to begin tapering bond purchases by the end of this year. The White House issued a forecast of 4.8% inflation in the fourth quarter and dropping to a 2.5% rise in the fourth quarter 2022.
As expected, the Supreme Court struck down the CDC’s limited eviction moratorium as it exceeded the CDC’s authority and harmed landlords who bear the cost. As of July 31st only 10% of the $47BN in rental assistance has been distributed to pay rents as the many state and local governments and charitable organizations struggled to put systems in place to distribute funds. The ruling said “The (eviction) moratorium has put…millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery,” “Many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude.”
Treasury yields rose with the 30-year bond yield closing at 1.908% and the 10-Year note closing at 1.308%. Crude oil rose to $68.72 a barrel and natural gas rose to $4.395 per MMBTUs. The U.S. dollar index fell to 92.68 and gold rose to $1821.50 an ounce.
In the economic numbers this week:
- The National Association of Realtors reported that existing home sales rose 2% in July from June and 1.5% from a year earlier as the inventory of homes for sale rose.
- The Commerce Department reported
- Durable goods orders declined 0.1% in the month of July following a 0.8% increase in June. July saw a 48.9% decrease in new orders for nondefense aircraft a parts which can be very volatile from month to month. New orders for nondefense capital good excluding aircraft were unchanged.
- Consumer spending rose 0.3% in July due to spending on services as opposed to goods. This is expected to decline in August.
- Incomes rose 1.1% in July.
- The Labor Department reported:
- A seasonally adjusted 353,000 workers filed initial claims for unemployment in the week ending August 21st, up 4,000 from a revised 349,000 the week before.
- The 4-week moving average of claims, designed to smooth out volatility, fell to 366,500.
- Continuing claims were nearly unchanged at 2.86MM in the week ending August 14th.
- A broader measure of claims including extended benefits, pandemic assistance and other programs rose from 11.7MM to 12.0MM in the week ending August 7th.
- 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 oil was unchanged at 11.4MMBPD.
- Natural gas storage rose 29BN cubic feet and is below the 5 year average at this time of year.
- Baker Hughes reported the number of active oil rigs rose 5 to 410. The number of active natural gas rigs was unchanged at 97.
Please call us if you have any questions.
Loren C. Rex, CFP®, 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.