U.S. and foreign stocks posted solid gains this week. A weaker than expected May jobs report on Friday did not deter the rally as manufacturing numbers continue to accelerate. The yield on the 10-year treasury bond yield dropped below 2.2% on Friday and the dollar weakened for the week.
In the numbers, this week:
- The Labor Department reported:
- First time claims for unemployment rose 13,000 to a seasonally adjusted 248,000. The four-week moving average of claims rose 2,500 to 238,000.
- The U.S. added 138,000 jobs in May, and the previous two months were revised down. The unemployment rate fell from 4.4% to 4.3%.
- The Institute for Supply Management reported its manufacturing activity index rose from 54.8 in April to 54.9 in May indicating an acceleration of growth.
- China’s Caixin/Markit Manufacturing Purchasing Managers index fell to 49.6% in May from 50.3 in April. Anything less than 50 represents a decline. This is the first time in 11 months that the index was below 50.
- The Energy Information Administration’s Weekly Petroleum Data report is here wpsrsummary (14).
- The Energy Information Administration reported
- Weekly field production of crude oil rose 22,000 barrels per day in the prior week. Also, I need to correct that last week’s email incorrectly showed a decline of 15,000 barrels per day, that should have showed an increase of 15,000.
- Natural gas in storage rose 81 Bcf from the prior week.
- Baker Hughes reported that oil drilling rigs increased by 11 to 733. Gas drilling rigs fell 2 to 183.
- The eurozone inflation rate dropped to 1.4% year over year in May, down sharply from 1.9% in April. Given the reduced level of inflation it is unlikely the ECB will move towards moving away from its negative interest rate policy anytime soon.
- The Commerce Department reported that in April:
- Personal-consumption expenditures increased 0.4%.
- Personal income rose 0.4%.
- The personal savings rate was unchanged at 5.3%.
- The price index for personal-consumption expenditures rose 0.2% after falling 0.2% in March. This is the FEDs preferred measure of inflation. From a year ago the price index rose 1.7% and excluding volatile food and energy were up only 1.5%, below the FED’s target of 2.0%.
- The U.S. trade deficit increased 5.2% in April. Imports grew and exports fell. This was mainly due to the stronger dollar. Over the past four months both imports and exports rose. From a year ago the trade deficit has risen 13.4%.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik Smith
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.