U.S. Stocks ended the week with significant declines while foreign stocks generally rose. North Korea tensions ratcheted down as Kim Jong Un said he would not fire missiles towards Guam. However, concerns over president Trump’s conflicting statements regarding the shocking events in Charlottesville and the resulting departures of CEOs on advisory panels, created uncertainty over his economic leadership in areas of infrastructure, trade and tax policy. The decline on Thursday was accelerated on the news of a large-scale terrorist attack in Spain. The FED minutes, released Wednesday, showed there was no consensus on the next short-term interest rate rise. Some FED members believe they have to act by year’s end due to labor market tightness and others citing the persistently low inflation rate as a reason to wait. However, there was consensus that the FED would announce the gradual shrinking of its balance sheet at the next meeting. The European Central Bank’s minutes showed many were concerned that unwinding stimulus would accelerate the already appreciating currency. The ten-year Treasury ended the week slightly lower and the dollar ended slightly higher. Oil prices ended the week significantly lower and gold was largely unchanged.
In the numbers, this week:
- Japan’s gross domestic product rose at a 4.0% pace in the second quarter.
- The Commerce Department reported:
- Housing starts fell 4.8% in July. However, most of the decline was in multifamily (-15.3%) versus single family (-0.4%). Building permits, a gauge of future starts also fell 4.1%. For the first seven months of this year starts are up 2.4%.
- Retail sales rose a bigger than expected 0.6% in July while June’s retail sales were revised from a 0.2% drop to a 0.3% gain. May retail sales were revised from negative 0.1% to flat. Core retail sales, excluding automobiles, gasoline, building materials and food services also rose 0.6%.
- The Labor Department reported first time claims for unemployment fell 12,000 to a seasonally adjusted 232,000.
- The Energy Information Administration’s Weekly Petroleum Data report is attached.
- The Energy Information Administration reported
- Weekly field production of crude oil rose 79,000 barrels per day in the prior week.
- Natural gas in storage rose 53 Bcf last week from the prior week.
- The Federal Reserve reported:
- Industrial production rose 0.2%. This broad measure includes manufacturing but also mining (including oil and gas production) and utilities. The latter two which are accelerating.
- Manufacturing fell 0.1% mainly due to reduced auto production.
- Baker Hughes reported that oil drilling rigs fell 5 to 763. Gas drilling rigs rose 1 to 182.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik 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.