Trade again took center stage in the markets with US Stocks seeing substantial losses following the announcement of tariffs on Mexico unless they stop the flow of immigrants flooding the border from Central America. The developed foreign markets stock index saw smaller losses and the emerging markets index gained for the week. This happened despite generally good economic data and statements by FED Vice Chairman Richard Clarida that the FED would consider cutting rates if economy slows more than expected. 30-year mortgage rates that were flirting with 5% in November have now fallen below 4% as market based interest rates continue to decline. The 10-Year treasury yield continued to fall based on trade fears, ending the week at 2.015%. The U.S. Dollar fell against a basket of foreign currencies and oil fell sharply to $53.30 a barrel.
Source: Fannie Mae
In the numbers this week:
- The S&P CoreLogic Case-Shiller National Home Price Index was up 3.7% in March from a year earlier. This is down from 3.9% year over year in February.
- Brazil’s gross domestic product shrank 0.2% in the first quarter.
- Canada’s gross domestic product rose at a 0.4% annual rate in the first quarter but the data saw a pickup in March.
- India grew at a 5.8% rate in the first quarter.
- The Commerce Department reported
- The nation’s gross domestic product was revised from a 3.2% growth rate in the first quarter to 3.1%. The revision included higher consumer spending and exports but lower business spending and inventories than originally measured. Still 3.1% is considered a very good rate of growth.
- The personal consumption expenditures price index, the FED’s preferred measure of inflation, rose 0.3% in April. From a year earlier prices rose 1.5%. Excluding volatile food and energy PCE prices rose 0.2% in April and are up 1.6% from a year earlier, substantially below the FED’s target of 2%.
- Personal consumption expenditures increased 0.3% in April from March. March’s increase was revised from 0.9% to 1.1%.
- Personal incomes rose 0.5% in April.
- The Labor Department reported first time claims for unemployment rose from a seasonally adjusted 211,000 to 215,000. The four week moving average of claims, designed to smooth out weekly fluctuations, fell to 216,750.
- The Energy Information Administration weekly report is here wpsrsummary. Also, the EIA reported in the prior week:
- U.S. Crude oil production rose from 12.2MM barrels per day to 12.3MM barrels per day. (Correction, last week I reported 12.5MM Barrels, this was a typo).
- Storage of natural gas rose 114BN cubic feet and is still below the five year average for this time of year.
- Baker Hughes reported in the past week that the number of active oil rigs rose 3 to 800 and the number of active gas rigs fell 2 to 184.
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.