Stocks ended the week lower as it became apparent that the FED rate cut next week likely will not be more than a quarter of a percent. Second quarter earnings started coming out this week but it is too soon to predict the overall direction of second quarter earnings. Tensions in the middle east may have also affected stock prices with Iran seizing a couple of tankers and the U.S. shooting down an Iranian drone. Despite this, crude oil prices ended lower but gold rose and so did the dollar against a basket of currencies. The 10-year Treasury ended at 2.375%.
In economic news, strong retail sales were offset by weak housing starts.
In the numbers this week:
- China reported an annual growth rate of 6.2% in the second quarter, the slowest quarter since 1992.
- The Commerce Department reported:
- Retail sales rose 0.4% in June, in spite of a drop in gasoline prices. From a year earlier, retail sales were up 3.4% in June.
- Housing starts fell 0.9% in June. Lack of skilled labor and buildable lots was attributed to the decline. Starts declined despite lower mortgage rates and lower materials costs.
- Residential building permits, a measure of future housing starts fell 6.1% in June.
- The Federal Reserve reported that industrial production was unchanged in June and is up 1.3% from a year earlier. Factory output rose 0.4% in June and mining output (including oil and gas) rose 0.2%. Utility production was down 3.6% in June due to milder that normal temperatures.
- The Labor Department reported first time claims for unemployment rose 8,000 to a seasonally adjusted 216,000 last week. The four week moving average of claims, designed to smooth out weekly fluctuations, fell to 218,750.
- The Energy Information Administration weekly report is here wpsrsummary. Also, the EIA reported in the prior week:
- U.S. Crude oil production fell from 12.3MM barrels per day to 12.0MM barrels per day.
- Storage of natural gas rose 62BN cubic feet and is still below the past five year average for this time of year.
- Baker Hughes reported in the past week that the number of active oil rigs fell 5 to 779 and the number of active gas rigs rose 2 to 174.
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
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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.