Major US equity indices were mixed in Q2 but the big story remained the major performance contribution of Mag7 stocks, helping to drive the S&P and Nasdaq to fresh record highs. Concerns about breadth were frequently aired, with a nearly 700bp performance gap opening between the official S&P and its equal-weight variant; RSP (3.0%). And while more than 78% of S&P constituents were above their 50-day moving averages at the end of Q1, that proportion shrank to 46% near the end of Q2.
Big tech was notably higher in Q2, particularly NVDA +36.7%, AAPL +22.8%, and AMZN +20.7%. Other relative outperformers included the broader semi space, large-cap software, networking/communications, hospitals, multis, copper/aluminum, multifamily REITs, telecom, and HPCs. Among the laggards were small-caps, drug stores, energy, machinery, road/rail, banks (particularly regionals), insurers, retailers, homebuilders, auto suppliers, chemicals, steel, and food.
Treasuries were weaker across the curve, with the 10Y yield rising 18bp q/q as market expectations for multiple 2024 rate cuts eased. Supply fears remained in focus though later-quarter auctions were fairly well received. The DXY dollar index was up 1.3%, showing particular strength against the yen. Gold logged its third straight quarterly gain, rising 4.5% for Q2. Oil was slightly weaker, with WTI crude settling down 2.0% after its big 16%+ jump in Q1.
One big story for the quarter was the hawkish repricing of Fed rate-cut expectations in the face of somewhat stubborn inflation and still-robust job growth. Fed speakers continued to voice their “greater confidence” mantra, suggesting that rate cuts may become appropriate should the incoming data reflect an economy on a sustainable path back to the 2% inflation target. The hawkish shift was given more concrete shape after the SEP from the June FOMC meeting indicated a median policymaker forecast for one rate cut (down from three in the March SEP).
The soft-landing narrative gained traction in Q2 as continued disinflation was accompanied some signs of gradual economic slowdown. May core CPI came in at 3.4% (its lowest y/y level since August 2021) while May core PCE printed at just 2.6% (smallest annual gain since March 2021). Job growth continued to defy expectations for weakening (June’s nonfarm payrolls report was notably stronger than consensus) but there was increasing attention on the health of the consumer given weaker retail sales reports and numerous corporate updates about the challenges of an uncertain macro environment. Note that by the end of June, the Citi economic surprise index was at its most negative level since August 2022.
Overall, corporate earnings remained resilient, with Q1 earnings for S&P constituents growing by 5.8%, better than the 3.4% expected at the end of the quarter (though earnings and revenue surprise statistics were not far from average). That said, big tech was also a distortion here–after stripping out the Magnificent 7 names, the remaining S&P components saw earnings decline by an average of 1.75% y/y. Nevertheless, analysts still forecast double-digit index earnings growth for the year and a 14%+ increase in 2025. It should be noted, however, that recent corporate updates have frequently discussed concerns about more cautious client behavior and value-conscious consumers trading down or putting off big-ticket purchases.
As we leave Q2, consensus seems to see the path of resistance remaining to the upside. Multiple analysts raised their year-end 2024 S&P targets in June, citing strong big-tech earnings prospects, a coming Fed easing cycle, ongoing disinflation, and a goldilocks economic environment. But there were also analysts taking a more pessimistic approach, including JP Morgan’s Kolanovic who maintained his bearish view, pointing to stretched valuations as well as the risk of decelerating economic growth weighing on corporate earnings.
Looking forward, the bull case remains founded on continuing disinflation traction, approaching (if delayed) Fed rate cuts, ongoing AI optimism, favorable July seasonality, and firm expectations for the soft-landing scenario to play itself out. However, to the bearish side remain worries about the health of the consumer, the potential for rising unemployment, worries about bumpy disinflation and a sluggish Fed rate response, expensive valuations, crowded positioning, and extremely narrow market breadth
The Baker Hughes rig count was down 7 this week. There are 581 oil and gas rigs operating in the US – Down 93 from last year.
Metals Complex-
Employment Picture –
Weekly Unemployment Claims– Released Thursday 6/27/2024 – In the week ending June 22, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 6,000 from the previous week’s revised level. The 4-week moving average was 236,000 an increase of 3,000 from the previous week’s revised average.
May Jobs Report – BLS Summary–Released 6/7/2024 – The US Economyadded 272k nonfarm jobs in May and the Unemployment rate increased 0.1% to 4.0%. Average hourly earnings increased 14 cents to $34.91. Hiring highlights include +68k Healthcare, +43k Government, and +42k Leisure and Hospitality.
Average hourly earnings increased 14 cents/0.4% to $34.91.
U3 unemployment rate increased 0.1% to 4.0%. U6 unemployment rate was unchanged at 7.4%.
The labor force participation rate declined 0.2% to 62.5%.
Average work week was unchanged at 34.3 hours.
Job Openings & Labor Turnover Survey JOLTS – Released 6/4/2024 – The number of job openings changed little at 8.1 million on the last business day of April, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.6 million and 5.4 million, respectively. Within separations, quits (3.5 million) and discharges (1.5 million) changed little.
Employment Cost Index –Released 4/30/2024 – Compensation costs for civilian workers increased 1.2% for the 3-month period ending in March 2024. Wages and salaries increased 1.1% and benefit costs increased 1.1% from December 2023. The 12-month period ending in March 2024 saw compensation costs increase by 4.2. The 12-month period ending March 2023 increased 4.8%. Wages and salaries increased 4.4 percent over the 12-month period ending in March 2024 and increased 5.0 percent for the 12-month period ending in March 2023. Benefit costs increased 3.7 percent over the 12-month period ending March 2024 and increased 4.5 percent for the 12-month period ending in March 2023. This report is published quarterly.
This Week’s Economic Data- Blue links take you to data source
Chicago PMI– Released 6/28/2024 – Chicago PMI remained in contraction territory in June but increased to 47.4 points up from 35.4 points in May. The latest reading indicated that Chicago’s economic activity contracted for the seventh consecutive month in June.
Personal Income – Released 6/28/2024 – Personal income increased $114.1 billion (0.5 percent at a monthly rate) in May. Disposable personal income (DPI)—personal income less personal current taxes—increased $94.0 billion (0.5 percent). Personal consumption expenditures (PCE) increased $47.8 billion (0.2 percent).
Third Estimate of 1st Quarter 2024 GDP– Released 6/27/2024 – Real gross domestic product (GDP) increased at an annual rate of 1.4 percent in the first quarter of 2024, according to the “third” estimate released by the Bureau of Economic Analysis. The “third” estimate is based on more complete source data than were available for the “second” and “advance” estimates. In the “second” estimate, the increase in real GDP was 1.3 percent. In the “advance” estimate, the increase in real GDP was 1.6 percent. In the fourth quarter of 2023, real GDP increased 3.4 percent. The upward revision primarily reflected a downward revision to imports, which are a subtraction in the calculation of GDP, and upward revisions to nonresidential fixed investment and government spending. These revisions were partly offset by a downward revision to consumer spending. The increase in real GDP primarily reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a decrease in private inventory investment. Imports increased.
Durable Goods Released 6/27/2024 – New orders for manufactured durable goods in May, up four consecutive months, increased $0.3 billion or 0.1 percent to $283.1 billion, the U.S. Census Bureau announced today. This followed a 0.2 percent April increase. Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders decreased 0.2 percent. Transportation equipment, up three of the last four months, led the increase, $0.5 billion or 0.6 percent to $95.4 billion. Shipments of manufactured durable goods in May, down following three consecutive months, decreased $1.0 billion or 0.3 percent to $284.7 billion. This followed a 1.2 percent April increase. Transportation equipment, also down following three consecutive month of increases, drove the decrease, $0.8 billion or 0.8 percent to $92.0 billion.
New Residential SalesReleased 6/26/2024 – Sales of new single‐family houses in May 2024 were at a seasonally adjusted annual rate of 619,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is 11.3 percent below the revised April rate of 698,000 and is 16.5 percent below the May 2023 estimate of 741,000. The median sales price of new houses sold in May 2024 was $417,400. The average sales price was $520,000.
Consumer Confidence– Released 6/25/2024 – Consumer Confidence decreased from 101.3 to 100.4 in June following a one month increase and three consecutive months of decline. The expectations index fell from 74.9 to 73.0. The Expectations Index has been below 80 (the threshold which usually signals a recession ahead) for five consecutive months.
Recent Economic Data – Blue Links bring you to data source
Existing Home Sales –Released 6/21/2024 – Existing home sales in May decreased 0.7% from April and fell 2.8% year over year. Existing home sales decreased to 4.11 million in May seasonally adjusted. The median price of existing homes for sale increased to a record high of $419,300.
Housing Starts– Released 6/20/2024 – May housing starts came in at 1,277,000, 5.5% below the April estimate and is 19.3% below the May 2023 rate. Building permits were 3.8% below the April rate at $1,386,000 and 9.5% below the May 2023 rate.
Industrial Production and Capacity Utilization – Released 6/18/2024 – Industrial production increased 0.9% in May. Manufacturing increased 0.9%. Utilities output increased 1.6%. Mining increased 0.3%. Total industrial production in May was 0.4% higher than its year-earlier level. Capacity utilization increased to 78.7% in May, a rate that is 0.9% below its long-run average.
Retail Sales– Released 6/18/2024– Headline retail sales were up 0.1% in May and are up 2.3% above May 2023.
Producer Price Index – Released 6/13/2024– The Producer Price Index for final demand decreased more than expected declining 0.2 percent in May, seasonally adjusted. Final demand increased 0.5 percent in April. On an unadjusted basis, the index for final demand moved up 2.2 percent for the 12 months ended in May.
Consumer Price Index –Released 6/12/2024– The Consumer Price Index for All Urban Consumers was unchanged in May on a seasonally adjusted basis, after increasing 0.3 percent in April. Over the last 12 months, the all items index increased 3.3 percent before seasonal adjustment.
US Light Vehicle Sales– Released 6/7/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.901 million units in May.
Consumer Credit –Released 6/7/2024– Consumer credit increased at a seasonally adjusted annual rate of 1.5 percent in April. Revolving credit decreased at an annual rate of 0.4 percent, while nonrevolving credit increased at an annual rate of 2.2 percent.
U.S. Trade Balance – Released 6/6/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $74.6 billion in April, up $6.0 billion from $68.6 billion in March. April exports were $263.7 billion, $2.1 billion more than March exports. April imports were $338.2 billion, $8.0 billion more than March imports. The April increase in the goods and services deficit reflected an increase in the goods deficit of $5.9 billion to $99.2 billion and a decrease in the services surplus of $0.1 billion to $24.7 billion.
PMI Non-Manufacturing Index– Released 6/5/2024 – Economic activity in the services sector expanded in May following a contraction in April following 15 consecutive months of expansion. The Services PMI® registered 53.8 percent, 4.4 percentage higher lower than April’s reading of 49.4 percent.
U.S. Construction Spending– Released 6/3/2024 – Construction spending during April 2024 was estimated at a seasonally adjusted annual rate of $2,099.0 billion, 0.1 percent below the revised March estimate of $2,101.5 billion. The April figure is 10.0 percent above the April 2023 estimate of $1,907.8 billion.
PMI Manufacturing Index – Released 6/3/2024 – The May Manufacturing PMI registered 48.7 percent, down 0.5 percent from April. The manufacturing sector contracted in May for the second consecutive month and the 18th time in the last 19 months. The overall economy continued in expansion for the 49th month after one month of contraction in April 2020. The New Orders Index remained in contraction territory at 45.4 percent, 3.7 percentage points lower than the figure of 49.1 percent recorded in April. The Production Index reading of 50.2 percent is a 1.1-percentage point decrease compared to April’s figure of 51.3 percent.
This week we get data on Manufacturing PMI, U.S. Construction Spending, Services PMI, the U.S. Trade Balance, JOLTS, and the June Jobs Report.
Disclaimer
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Weekly Market Update | Week 26, 2024
Major US equity indices were mixed in Q2 but the big story remained the major performance contribution of Mag7 stocks, helping to drive the S&P and Nasdaq to fresh record highs. Concerns about breadth were frequently aired, with a nearly 700bp performance gap opening between the official S&P and its equal-weight variant; RSP (3.0%). And while more than 78% of S&P constituents were above their 50-day moving averages at the end of Q1, that proportion shrank to 46% near the end of Q2.
Big tech was notably higher in Q2, particularly NVDA +36.7%, AAPL +22.8%, and AMZN +20.7%. Other relative outperformers included the broader semi space, large-cap software, networking/communications, hospitals, multis, copper/aluminum, multifamily REITs, telecom, and HPCs. Among the laggards were small-caps, drug stores, energy, machinery, road/rail, banks (particularly regionals), insurers, retailers, homebuilders, auto suppliers, chemicals, steel, and food.
Treasuries were weaker across the curve, with the 10Y yield rising 18bp q/q as market expectations for multiple 2024 rate cuts eased. Supply fears remained in focus though later-quarter auctions were fairly well received. The DXY dollar index was up 1.3%, showing particular strength against the yen. Gold logged its third straight quarterly gain, rising 4.5% for Q2. Oil was slightly weaker, with WTI crude settling down 2.0% after its big 16%+ jump in Q1.
One big story for the quarter was the hawkish repricing of Fed rate-cut expectations in the face of somewhat stubborn inflation and still-robust job growth. Fed speakers continued to voice their “greater confidence” mantra, suggesting that rate cuts may become appropriate should the incoming data reflect an economy on a sustainable path back to the 2% inflation target. The hawkish shift was given more concrete shape after the SEP from the June FOMC meeting indicated a median policymaker forecast for one rate cut (down from three in the March SEP).
The soft-landing narrative gained traction in Q2 as continued disinflation was accompanied some signs of gradual economic slowdown. May core CPI came in at 3.4% (its lowest y/y level since August 2021) while May core PCE printed at just 2.6% (smallest annual gain since March 2021). Job growth continued to defy expectations for weakening (June’s nonfarm payrolls report was notably stronger than consensus) but there was increasing attention on the health of the consumer given weaker retail sales reports and numerous corporate updates about the challenges of an uncertain macro environment. Note that by the end of June, the Citi economic surprise index was at its most negative level since August 2022.
Overall, corporate earnings remained resilient, with Q1 earnings for S&P constituents growing by 5.8%, better than the 3.4% expected at the end of the quarter (though earnings and revenue surprise statistics were not far from average). That said, big tech was also a distortion here–after stripping out the Magnificent 7 names, the remaining S&P components saw earnings decline by an average of 1.75% y/y. Nevertheless, analysts still forecast double-digit index earnings growth for the year and a 14%+ increase in 2025. It should be noted, however, that recent corporate updates have frequently discussed concerns about more cautious client behavior and value-conscious consumers trading down or putting off big-ticket purchases.
As we leave Q2, consensus seems to see the path of resistance remaining to the upside. Multiple analysts raised their year-end 2024 S&P targets in June, citing strong big-tech earnings prospects, a coming Fed easing cycle, ongoing disinflation, and a goldilocks economic environment. But there were also analysts taking a more pessimistic approach, including JP Morgan’s Kolanovic who maintained his bearish view, pointing to stretched valuations as well as the risk of decelerating economic growth weighing on corporate earnings.
Looking forward, the bull case remains founded on continuing disinflation traction, approaching (if delayed) Fed rate cuts, ongoing AI optimism, favorable July seasonality, and firm expectations for the soft-landing scenario to play itself out. However, to the bearish side remain worries about the health of the consumer, the potential for rising unemployment, worries about bumpy disinflation and a sluggish Fed rate response, expensive valuations, crowded positioning, and extremely narrow market breadth
Fixed Income:
Yield Curve:
May FOMC Statement April Minutes Credit, Liquidity and Balance Sheet Federal Reserve Dot Plots
Treasury.gov yields FOMC Policy Normalization Statement Longer- Run Goals Jan 2024
Foreign Exchange Market –
Energy Complex-
The Baker Hughes rig count was down 7 this week. There are 581 oil and gas rigs operating in the US – Down 93 from last year.
Metals Complex-
Employment Picture –
Weekly Unemployment Claims – Released Thursday 6/27/2024 – In the week ending June 22, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 6,000 from the previous week’s revised level. The 4-week moving average was 236,000 an increase of 3,000 from the previous week’s revised average.
May Jobs Report – BLS Summary – Released 6/7/2024 – The US Economyadded 272k nonfarm jobs in May and the Unemployment rate increased 0.1% to 4.0%. Average hourly earnings increased 14 cents to $34.91. Hiring highlights include +68k Healthcare, +43k Government, and +42k Leisure and Hospitality.
Job Openings & Labor Turnover Survey JOLTS – Released 6/4/2024 – The number of job openings changed little at 8.1 million on the last business day of April, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.6 million and 5.4 million, respectively. Within separations, quits (3.5 million) and discharges (1.5 million) changed little.
Employment Cost Index – Released 4/30/2024 – Compensation costs for civilian workers increased 1.2% for the 3-month period ending in March 2024. Wages and salaries increased 1.1% and benefit costs increased 1.1% from December 2023. The 12-month period ending in March 2024 saw compensation costs increase by 4.2. The 12-month period ending March 2023 increased 4.8%. Wages and salaries increased 4.4 percent over the 12-month period ending in March 2024 and increased 5.0 percent for the 12-month period ending in March 2023. Benefit costs increased 3.7 percent over the 12-month period ending March 2024 and increased 4.5 percent for the 12-month period ending in March 2023. This report is published quarterly.
This Week’s Economic Data- Blue links take you to data source
Chicago PMI – Released 6/28/2024 – Chicago PMI remained in contraction territory in June but increased to 47.4 points up from 35.4 points in May. The latest reading indicated that Chicago’s economic activity contracted for the seventh consecutive month in June.
Personal Income – Released 6/28/2024 – Personal income increased $114.1 billion (0.5 percent at a monthly rate) in May. Disposable personal income (DPI)—personal income less personal current taxes—increased $94.0 billion (0.5 percent). Personal consumption expenditures (PCE) increased $47.8 billion (0.2 percent).
Third Estimate of 1st Quarter 2024 GDP – Released 6/27/2024 – Real gross domestic product (GDP) increased at an annual rate of 1.4 percent in the first quarter of 2024, according to the “third” estimate released by the Bureau of Economic Analysis. The “third” estimate is based on more complete source data than were available for the “second” and “advance” estimates. In the “second” estimate, the increase in real GDP was 1.3 percent. In the “advance” estimate, the increase in real GDP was 1.6 percent. In the fourth quarter of 2023, real GDP increased 3.4 percent. The upward revision primarily reflected a downward revision to imports, which are a subtraction in the calculation of GDP, and upward revisions to nonresidential fixed investment and government spending. These revisions were partly offset by a downward revision to consumer spending. The increase in real GDP primarily reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a decrease in private inventory investment. Imports increased.
Durable Goods Released 6/27/2024 – New orders for manufactured durable goods in May, up four consecutive months, increased $0.3 billion or 0.1 percent to $283.1 billion, the U.S. Census Bureau announced today. This followed a 0.2 percent April increase. Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders decreased 0.2 percent. Transportation equipment, up three of the last four months, led the increase, $0.5 billion or 0.6 percent to $95.4 billion. Shipments of manufactured durable goods in May, down following three consecutive months, decreased $1.0 billion or 0.3 percent to $284.7 billion. This followed a 1.2 percent April increase. Transportation equipment, also down following three consecutive month of increases, drove the decrease, $0.8 billion or 0.8 percent to $92.0 billion.
New Residential Sales Released 6/26/2024 – Sales of new single‐family houses in May 2024 were at a seasonally adjusted annual rate of 619,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is 11.3 percent below the revised April rate of 698,000 and is 16.5 percent below the May 2023 estimate of 741,000. The median sales price of new houses sold in May 2024 was $417,400. The average sales price was $520,000.
Consumer Confidence– Released 6/25/2024 – Consumer Confidence decreased from 101.3 to 100.4 in June following a one month increase and three consecutive months of decline. The expectations index fell from 74.9 to 73.0. The Expectations Index has been below 80 (the threshold which usually signals a recession ahead) for five consecutive months.
Recent Economic Data – Blue Links bring you to data source
Existing Home Sales – Released 6/21/2024 – Existing home sales in May decreased 0.7% from April and fell 2.8% year over year. Existing home sales decreased to 4.11 million in May seasonally adjusted. The median price of existing homes for sale increased to a record high of $419,300.
Housing Starts– Released 6/20/2024 – May housing starts came in at 1,277,000, 5.5% below the April estimate and is 19.3% below the May 2023 rate. Building permits were 3.8% below the April rate at $1,386,000 and 9.5% below the May 2023 rate.
Industrial Production and Capacity Utilization – Released 6/18/2024 – Industrial production increased 0.9% in May. Manufacturing increased 0.9%. Utilities output increased 1.6%. Mining increased 0.3%. Total industrial production in May was 0.4% higher than its year-earlier level. Capacity utilization increased to 78.7% in May, a rate that is 0.9% below its long-run average.
Retail Sales– Released 6/18/2024 – Headline retail sales were up 0.1% in May and are up 2.3% above May 2023.
Producer Price Index – Released 6/13/2024 – The Producer Price Index for final demand decreased more than expected declining 0.2 percent in May, seasonally adjusted. Final demand increased 0.5 percent in April. On an unadjusted basis, the index for final demand moved up 2.2 percent for the 12 months ended in May.
Consumer Price Index – Released 6/12/2024 – The Consumer Price Index for All Urban Consumers was unchanged in May on a seasonally adjusted basis, after increasing 0.3 percent in April. Over the last 12 months, the all items index increased 3.3 percent before seasonal adjustment.
US Light Vehicle Sales– Released 6/7/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.901 million units in May.
Consumer Credit – Released 6/7/2024 – Consumer credit increased at a seasonally adjusted annual rate of 1.5 percent in April. Revolving credit decreased at an annual rate of 0.4 percent, while nonrevolving credit increased at an annual rate of 2.2 percent.
U.S. Trade Balance – Released 6/6/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $74.6 billion in April, up $6.0 billion from $68.6 billion in March. April exports were $263.7 billion, $2.1 billion more than March exports. April imports were $338.2 billion, $8.0 billion more than March imports. The April increase in the goods and services deficit reflected an increase in the goods deficit of $5.9 billion to $99.2 billion and a decrease in the services surplus of $0.1 billion to $24.7 billion.
PMI Non-Manufacturing Index – Released 6/5/2024 – Economic activity in the services sector expanded in May following a contraction in April following 15 consecutive months of expansion. The Services PMI® registered 53.8 percent, 4.4 percentage higher lower than April’s reading of 49.4 percent.
U.S. Construction Spending– Released 6/3/2024 – Construction spending during April 2024 was estimated at a seasonally adjusted annual rate of $2,099.0 billion, 0.1 percent below the revised March estimate of $2,101.5 billion. The April figure is 10.0 percent above the April 2023 estimate of $1,907.8 billion.
PMI Manufacturing Index – Released 6/3/2024 – The May Manufacturing PMI registered 48.7 percent, down 0.5 percent from April. The manufacturing sector contracted in May for the second consecutive month and the 18th time in the last 19 months. The overall economy continued in expansion for the 49th month after one month of contraction in April 2020. The New Orders Index remained in contraction territory at 45.4 percent, 3.7 percentage points lower than the figure of 49.1 percent recorded in April. The Production Index reading of 50.2 percent is a 1.1-percentage point decrease compared to April’s figure of 51.3 percent.
This week we get data on Manufacturing PMI, U.S. Construction Spending, Services PMI, the U.S. Trade Balance, JOLTS, and the June Jobs Report.
Disclaimer
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Data Sources:
Conference Board Economic Indicators Bureau of Economic Analysis (BEA) Congressional Budget Office (CBO) U.S. Bureau of Labor Statistics (BLS) Federal Reserve Economic Data (FRED Charts)
CME Fed Watch U.S. Treasury – Yields U.S. Census Bureau Institute for Supply Management (ISM) Weekly DOL Employment Data BLS Monthly Jobs Report JOLTS All capital in one visualization 2020
US Energy Admn (EIA) BLS Consumer Price Index CPI BLS Producer Price Index PPIAtlanta Fed GDPNOW NY Fed Nowcast GDP US Census Bureau Housing Starts U.S. Energy Admn
Consumer Credit USCB Retail Sales Construction Spending Federal Reserve Dot Plots 2017 NY Empire Index Philadelphia Federal Reserve P/E Ratio Data -Yardeni Research
Technical Analysis Info: Koyfin.com StockCharts.com – Financial Charts Exponential vs Simple Moving Average
Other links: 1973 Arab Oil Embargo Hunt Brothers Silver Asian Contagion Long-Term Capital bailout
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