US Markets were mixed for the week with the Dow up slightly, the S&P down slightly and the NASDAQ suffering a significant loss after a late Friday selloff in tech stocks. It should be noted that Tech stocks have risen sharply since the beginning of the year. Foreign stocks also experienced losses on the heels of the UK election with no party winning a majority in the House of Commons. The ECB met this week and while Mario Draghi acknowledged the pickup in Europe’s economic growth and said the ECB will likely not cut interest rates further from their already negative levels, he warned that inflation will remain weak and that the ECB has not even discussed tapering the €60BN per month bond purchase program. Oil fell sharply as the U.S. inventory of crude rose and the EIA reported a drop in gasoline demand. The 10 year U.S. Treasury yield rose slightly to 2.2%. The U.S. dollar rose against a basket of currencies.
In the numbers, this week:
- The Labor Department reported:
- First time claims for unemployment fell 10,000 to a seasonally adjusted 245,000. The four-week moving average of claims rose 2,250 to 242,000
- A revision to the first quarters productivity rate from negative 0.6% to unchanged. From last year’s first quarter productivity has risen 1.2%. Productivity growth is important to allow wages to grow faster than inflation.
- Unit labor cost increases were revised from 3.0% to 2.2%.
- The Institute for Supply Management reported its non-manufacturing activity index fell from 57.5 in April to 56.9 in May. While the services sector is still accelerating, it has doing so at a slower rate.
- Eurostat revised the 1st quarter growth rate to an annualized rate of 2.3%.
- The Energy Information Administration’s Weekly Petroleum Data report is here wpsrsummary (15).
- The Energy Information Administration reported
- Weekly field production of crude oil fell 24,000 barrels per day in the prior week.
- Natural gas in storage rose 106 Bcf last week from the prior week.
- Baker Hughes reported that oil drilling rigs increased by 8 to 741. Gas drilling rigs rose 3 to 185.
- The Commerce Department reported that factory goods orders fell 0.2% in April
The Federal Reserve meets this week and is widely expected to raise short term rates .025%. The focus will be on what the FED intends to do going forward.
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
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.