Stocks ended the week mixed with growth stocks retreating modestly and value and small cap stocks gaining. Some states are reversing their reopening which caused concern but promising vaccine trials encouraged traders. Freddie Mac reported that the average 30-year mortgage rate fell to a record low of 2.98%. June saw a nice increase in retail sales after a dismal April and May as people returned to stores and industrial production improved in June.
Treasury yields were fell with the 30-year bond yield at 1.329% and the 10-Year note at 0.625%. Crude oil was unchanged at $40.58 a barrel and natural gas fell to $1.708 per MMBTUs. The U.S. dollar index ended the week lower at 95.95 and gold prices rose to $1812.30 an ounce.
In the economic numbers this week:
- The U.K. reported that the economy grew 1.8% in May, following a 20% contraction in April.
- China reported:
- Gross domestic product rose 3.2% in the second quarter from a year ago. This follows a 6.8% year over year decline in the second quarter.
- Industrial production rose 4.8% in June and are now at pre virus levels.
- Retail sales fell 1.8% in June.
- Imports of meat and other agricultural products from the U.S. rose 11.3% in June from a year earlier following a 13.5% drop in May.
- Imports from the rest of the world rose 2.7% following a 16.7% drop in May.
- Total exports rose 0.5% in June following a 3.3% decline in May.
- The European Union’s statistics agency reported a record increase in industrial production of 12.4% in May. Still industrial production is 19% lower than in February.
- The Bank of Japan left interest rates unchanged and forecast a deeper slump this year and a faster increase in the following years.
- The Commerce Department reported that retail sales rose 7.5% in June as stores reopened. Gasoline sales rose 15.3%, bars and restaurants rose 20%, online sales fell 2.4% and grocery store sales fell 1.6%.
- The Federal Reserve reported that industrial production rose a seasonally adjusted 5.4% in the month of June. Manufacturing rose 7.2% mainly due to automobiles and parts. Mining output including oil and gas fell 2.9% but utilities rose 4.2% on the warmer than average weather.
- The Labor Department reported:
- 1.3MM workers filed initial unemployment claims last week, nearly unchanged from the previous week as some states reverse course on opening.
- The consumer price index rose 0.6% in June after three monthly declines following sharp increases in gasoline prices. Excluding volatile food and energy prices rose 0.2% in June following a 0.1% decline in May. From a year earlier, consumer prices were up 0.6% in June, up from 0.1% in May. Core prices were up 1.2% from a year earlier.
- Factset reported with 9% of the S&P500 companies reporting 2nd quarter earnings, the blended earnings decline is 44.0%.
- The EIA weekly oil report is here wpsrsummary (8). Also, the EIA reported in the past week:
- Field production of crude oil was unchanged at 11.0MM barrels per day. The peak production at the end of February was 13.1MM barrels per day.
- Natural gas storage rose by 45BN cubic feet and is above the five year average at this time of year.
- Baker Hughes reported the number of active oil rigs fell 1 to 180 and the number of active natural gas rigs fell 4 to 71.
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
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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.