The Russell 2000 added another 1.5% last week bringing the month to date return to 10.5% while this S&P 500 is flat over the same time period. The S&P 500 and Nasdaq were both lower last week lower, while the equal-weight S&P 500 rose 0.8% the S&P 600 small cap rose 2%. Big tech/momentum was again the biggest drag with declines across the Magnificent Seven (MAGS -3.8%) and semis (SOX -3.1%). Other underperformers included autos and EVs (F -20%), parcels and logistics, travel and leisure, QSRs, payments rails, and entertainment. Outperformers included homebuilders, investment banks, regional banks. insurance, life sciences, hospitals, and toys. Treasuries were mostly firmer with the curve steepening. The dollar index was down 0.1%, though yen strength was the big FX story of the week. Gold was down 0.8%. Bitcoin futures were up 1.2%. WTI crude (October) was down 2%.
With earnings season at its peak and 41% of S&P 500 having now reported, the blended EPS growth rate for Q2 is running at 9.8%, up 0.2pp w/w and above the 8.9% expected at the end of the quarter (FactSet’s Earnings Insight). Around 78% of companies have beat, better than the four-quarter average of 77%. However, companies are reporting earnings 4.4% above expectations, below the 6.5% average over the past year, while the 1.1% revenue surprise rate is in line with the one-year average but nearly half the five-year average of 2.0%.
Last week saw more of the same rotation from recent weeks, with small caps and cyclicals among the relative outperformers, while technology, AI-linked stocks, and momentum again sold off. The bulk of the tech selloff was sparked by cautious takeaways from this week’s TSLA -8.1% and GOOGL -6% earnings, which added to scrutiny around AI capex and profitability, while results including V -2.3% and LW -26.8% added pressure to the resilient consumer narrative. The Mag 7 collectively is now down ~13% since peaking on 10-Jul, while the small cap Russell 2000 is up nearly 10% over the same period.
Last week also saw even more yield curve steepening, with the 2Y yield back below 4.40% for the first time since February. The 2Y/10Y spread narrowed at one point to -13 bp, the least inverted since July-22. The steepening played into the bearish narrative, however, as it suggests the market is increasingly pricing in Fed rate cuts to try to offset building growth headwinds. Sentiment was also in focus after the latest AAII Bullish Sentiment fell 9.5pp w/w to 43.2%, the biggest weekly decline since Feb-23. A high earnings bar, seasonal factors, political uncertainty, and cracks in consumer narrative were also other pieces of the bearish narrative this week.
With the short end coming down the spread between the 10 year yield and the 2 year yield is tightening and now stands at just -16bps.
Potential Fed rate cut outlook remains the key piece of the bullish narrative. The market ramped up rate cut odds this week given disinflation traction and growth concerns, with the market median year-end fed funds rate down ~ 5bp w/w to 4.78%, or 59 bp of cuts from the current midpoint. Goldman Sachs economists said this week they could see a case for a July rate cut though are holding to their September base case, while former NY Fed President Dudley got attention this week for arguing the Fed should cut in July as it might already be too late to fend off a recession. Keep in mind that the Fed meeting this week and Wednesday at 2pm they will make any announcement regarding a rate change.
Other pieces of the bullish narrative include more optimism on the soft landing scenario, a fourth-straight week of US equity inflows, the reopening of the buyback window near month-end, some positive earnings takeaways including margin tailwinds from cost-cutting and operational efficiencies. This week saw a bit of a reversal of the Trump trade after President Biden dropped his reelection campaign and VP Harris gained some momentum as the likely nominee.
Data last week that helped elevate growth concerns included July flash manufacturing PMI, which unexpectedly fell into contraction territory, though flash services PMI improved slightly. June existing home sales fell to the slowest pace since December and new home sales since November. The declines came despite falling mortgage rates, suggesting lower borrowing costs may not be enough to offset weakening demand. The July Richmond Fed Index also fell to the lowest level since May-20. Initial jobless claims and continuing claims improved w/w, though initial claims were still at the highest level in nearly a year and continuing claims since Nov-21.
Labor market data will be in focus this week. Tuesday’s June JOLTS report (10 ET) is expected to show job openings down to 8.0M, which would be the lowest since April (and second lowest since Feb-21. Data Wednesday include July ADP private payrolls, which is expected to tick up 4K m/m to 154K. Friday’s July nonfarm payrolls report is expected to see a deceleration from June’s 206K to 177K. The unemployment rate is expected to hold at 4.1%, while average hourly earnings are also expected to hold at 0.3% m/m and 3.9% y/y.
Other data this week include Tuesday’s July Consumer Confidence (10 ET), which is expected to slip to the lowest level since April. Wednesday’s June pending home sales report (10ET) is expected to show a 5% rebound to 74.4 from the May 70.8 series low (since 2001). Thursday’s July ISM Manufacturing report is expected to hold at 48.5.
The Baker Hughes rig count was up 3 this week. There are 589 oil and gas rigs operating in the US – Down 75 from last year.
Metals Complex-
Employment Picture –
Weekly Unemployment Claims– Released Thursday 7/25/2024 – In the week ending July 20, the advance figure for seasonally adjusted initial claims was 235,000, a decrease of 10,000 from the previous week’s revised level. The 4-week moving average was 235,500 an increase of 250 from the previous week’s revised average.
June Jobs Report – BLS Summary–Released 7/5/2024– The US Economyadded 206k nonfarm jobs in June and the Unemployment rate increased 0.1% to 4.1%. Average hourly earnings increased 10 cents to $35.00. Hiring highlights include +49k Healthcare, +70k Government, and +34k Social Assistance.
Average hourly earnings increased 10 cents/0.3% to $35.00.
U3 unemployment rate increased 0.1% to 4.1%. U6 unemployment rate was unchanged at 7.4%.
The labor force participation rate was little changed at 62.6%.
Average work week was unchanged at 34.3 hours.
Job Openings & Labor Turnover Survey JOLTS – Released 7/2/2024 – The number of job openings changed little at 8.1 million on the last business day of May, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.8 million and 5.4 million, respectively. Within separations, quits (3.5 million) and discharges (1.7 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
Personal Income – Released 7/26/2024 – Personal income increased $50.4 billion (0.2 percent at a monthly rate) in May. Disposable personal income (DPI)—personal income less personal current taxes—increased $37.7 billion (0.2 percent). Personal consumption expenditures (PCE) increased $57.6 billion (0.3 percent).
Advance Estimate of 2nd Quarter 2024 GDP – Released 7/25/2024 – Real gross domestic product (GDP) increased at an annual rate of 2.8 percent in the second quarter of 2024, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.4 percent. The GDP “advance” estimate is based on source data that are incomplete or subject to further revision. The increase in real GDP primarily reflected increases in consumer spending, private inventory investment, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
Durable Goods – Released 7/25/2024 – New orders for manufactured durable goods in June, down following four consecutive months on increases, decreased $18.6 billion or 6.6 percent to $264.5 billion, the U.S. Census Bureau announced today. This followed a 0.1 percent May increase. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders decreased 7.0 percent. Transportation equipment, down two of the last three months, led the decrease, $19.6 billion or 20.5 percent to $75.8 billion. Shipments of manufactured durable goods in June, up four of the last five months, increased $3.5 billion or 1.2 percent to $288.1 billion. This followed a 0.4 percent May decrease. Transportation equipment, also up four of the last five months, drove the increase, $3.5 billion or 3.8 percent to $95.3 billion.
New Residential Sales – Released 7/24/2024 – Sales of new single‐family houses in June 2024 were at a seasonally adjusted annual rate of 617,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is 0.6 percent below the revised May rate of 621,000 and is 7.4 percent below the June 2023 estimate of 666,000. The median sales price of new houses sold in June 2024 was $417,300. The average sales price was $487,200.
Existing Home Sales – Released 7/23/2024 – Existing home sales in June decreased 5.4% from May and fell 5.4% year over year. Existing home sales decreased to 3.89 million in June seasonally adjusted. The median price of existing homes for sale increased to a record high of $426,900.
Recent Economic Data
Housing Starts– Released 7/17/2024 – June housing starts came in at 1,353,000, 3.0% above the May estimate but is 4.4% below the June 2023 rate. Building permits were 3.4% above the May rate at $1,446,000 but is 3.1% below the June 2023 rate.
Industrial Production and Capacity Utilization – Released 7/17/2024 – Industrial production increased 0.6% in June. Manufacturing increased 0.4%. Utilities output increased 2.8%. Mining increased 0.3%. Total industrial production in June was 1.6% higher than its year-earlier level. Capacity utilization increased to 78.8% in June, a rate that is 0.9% below its long-run average.
Retail Sales– Released 7/16/2024– Headline retail sales were virtually unchanged in June and are up 2.3% above June 2023.
Producer Price Index– Released 7/12/2024– The Producer Price Index for final demand increased 0.2 percent in June, seasonally adjusted. Final demand was unchanged in May. On an unadjusted basis, the index for final demand moved up 2.6 percent for the 12 months ended in June.
Consumer Price Index –Released 7/11/2024– The Consumer Price Index for All Urban Consumers decreased 0.1% in June on a seasonally adjusted basis, after being unchanged in May. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment.
Consumer Credit–Released 7/8/2024– Consumer credit increased at a seasonally adjusted annual rate of 2.7 percent in May. Revolving credit increased at an annual rate of 6.3 percent, while nonrevolving credit increased at an annual rate of 1.4 percent.
US Light Vehicle Sales– Released 7/5/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.290 million units in June.
U.S. Trade Balance–Released 7/3/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $75.1 billion in May, up $0.6 billion from $74.5 billion in April. May exports were $261.7 billion, $1.8 billion more than April exports. May imports were $336.7 billion, $1.2 billion less than April imports. The May increase in the goods and services deficit reflected an increase in the goods deficit of $0.9 billion to $100.2 billion and an increase in the services surplus of $0.3 billion to $25.1 billion.
PMI Non-Manufacturing Index– Released 7/3/2024 – Economic activity in the services sector contracted in June for the second time in three months. The Services PMI® registered 48.8 percent, 5.0 percentage lower than May’s reading of 53.8 percent.
U.S. Construction Spending– Released 7/1/2024 – Construction spending during May 2024 was estimated at a seasonally adjusted annual rate of $2,139.8 billion, 0.1 percent below the revised April estimate of $2,142.1 billion. The May figure is 6.4 percent above the May 2023 estimate of $2,011.8 billion.
PMI Manufacturing Index – Released 7/1/2024 – The June Manufacturing PMI registered 48..5 percent, down 0.2 percent from May. The manufacturing sector contracted in June for the third consecutive month and the 19th time in the last 20 months. The overall economy continued in expansion for the 50th month after one month of contraction in April 2020. The New Orders Index remained in contraction territory at 49.3 percent, 3.9 percentage points higher than the figure of 45.4 percent recorded in May. The Production Index reading of 48.5 percent is a 1.7-percentage point decrease compared to May’s figure of 50.2 percent.
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.
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.
This week we get data on Consumer Confidence, Chicago PMI, Manufacturing PMI, U.S. Construction Spending, the Employment Cost Index, JOLTS, and the July Jobs Report.
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 30, 2024
The Russell 2000 added another 1.5% last week bringing the month to date return to 10.5% while this S&P 500 is flat over the same time period. The S&P 500 and Nasdaq were both lower last week lower, while the equal-weight S&P 500 rose 0.8% the S&P 600 small cap rose 2%. Big tech/momentum was again the biggest drag with declines across the Magnificent Seven (MAGS -3.8%) and semis (SOX -3.1%). Other underperformers included autos and EVs (F -20%), parcels and logistics, travel and leisure, QSRs, payments rails, and entertainment. Outperformers included homebuilders, investment banks, regional banks. insurance, life sciences, hospitals, and toys. Treasuries were mostly firmer with the curve steepening. The dollar index was down 0.1%, though yen strength was the big FX story of the week. Gold was down 0.8%. Bitcoin futures were up 1.2%. WTI crude (October) was down 2%.
With earnings season at its peak and 41% of S&P 500 having now reported, the blended EPS growth rate for Q2 is running at 9.8%, up 0.2pp w/w and above the 8.9% expected at the end of the quarter (FactSet’s Earnings Insight). Around 78% of companies have beat, better than the four-quarter average of 77%. However, companies are reporting earnings 4.4% above expectations, below the 6.5% average over the past year, while the 1.1% revenue surprise rate is in line with the one-year average but nearly half the five-year average of 2.0%.
Last week saw more of the same rotation from recent weeks, with small caps and cyclicals among the relative outperformers, while technology, AI-linked stocks, and momentum again sold off. The bulk of the tech selloff was sparked by cautious takeaways from this week’s TSLA -8.1% and GOOGL -6% earnings, which added to scrutiny around AI capex and profitability, while results including V -2.3% and LW -26.8% added pressure to the resilient consumer narrative. The Mag 7 collectively is now down ~13% since peaking on 10-Jul, while the small cap Russell 2000 is up nearly 10% over the same period.
Last week also saw even more yield curve steepening, with the 2Y yield back below 4.40% for the first time since February. The 2Y/10Y spread narrowed at one point to -13 bp, the least inverted since July-22. The steepening played into the bearish narrative, however, as it suggests the market is increasingly pricing in Fed rate cuts to try to offset building growth headwinds. Sentiment was also in focus after the latest AAII Bullish Sentiment fell 9.5pp w/w to 43.2%, the biggest weekly decline since Feb-23. A high earnings bar, seasonal factors, political uncertainty, and cracks in consumer narrative were also other pieces of the bearish narrative this week.
With the short end coming down the spread between the 10 year yield and the 2 year yield is tightening and now stands at just -16bps.
Potential Fed rate cut outlook remains the key piece of the bullish narrative. The market ramped up rate cut odds this week given disinflation traction and growth concerns, with the market median year-end fed funds rate down ~ 5bp w/w to 4.78%, or 59 bp of cuts from the current midpoint. Goldman Sachs economists said this week they could see a case for a July rate cut though are holding to their September base case, while former NY Fed President Dudley got attention this week for arguing the Fed should cut in July as it might already be too late to fend off a recession. Keep in mind that the Fed meeting this week and Wednesday at 2pm they will make any announcement regarding a rate change.
Other pieces of the bullish narrative include more optimism on the soft landing scenario, a fourth-straight week of US equity inflows, the reopening of the buyback window near month-end, some positive earnings takeaways including margin tailwinds from cost-cutting and operational efficiencies. This week saw a bit of a reversal of the Trump trade after President Biden dropped his reelection campaign and VP Harris gained some momentum as the likely nominee.
Data last week that helped elevate growth concerns included July flash manufacturing PMI, which unexpectedly fell into contraction territory, though flash services PMI improved slightly. June existing home sales fell to the slowest pace since December and new home sales since November. The declines came despite falling mortgage rates, suggesting lower borrowing costs may not be enough to offset weakening demand. The July Richmond Fed Index also fell to the lowest level since May-20. Initial jobless claims and continuing claims improved w/w, though initial claims were still at the highest level in nearly a year and continuing claims since Nov-21.
Labor market data will be in focus this week. Tuesday’s June JOLTS report (10 ET) is expected to show job openings down to 8.0M, which would be the lowest since April (and second lowest since Feb-21. Data Wednesday include July ADP private payrolls, which is expected to tick up 4K m/m to 154K. Friday’s July nonfarm payrolls report is expected to see a deceleration from June’s 206K to 177K. The unemployment rate is expected to hold at 4.1%, while average hourly earnings are also expected to hold at 0.3% m/m and 3.9% y/y.
Other data this week include Tuesday’s July Consumer Confidence (10 ET), which is expected to slip to the lowest level since April. Wednesday’s June pending home sales report (10ET) is expected to show a 5% rebound to 74.4 from the May 70.8 series low (since 2001). Thursday’s July ISM Manufacturing report is expected to hold at 48.5.
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 up 3 this week. There are 589 oil and gas rigs operating in the US – Down 75 from last year.
Metals Complex-
Employment Picture –
Weekly Unemployment Claims – Released Thursday 7/25/2024 – In the week ending July 20, the advance figure for seasonally adjusted initial claims was 235,000, a decrease of 10,000 from the previous week’s revised level. The 4-week moving average was 235,500 an increase of 250 from the previous week’s revised average.
June Jobs Report – BLS Summary – Released 7/5/2024 – The US Economyadded 206k nonfarm jobs in June and the Unemployment rate increased 0.1% to 4.1%. Average hourly earnings increased 10 cents to $35.00. Hiring highlights include +49k Healthcare, +70k Government, and +34k Social Assistance.
Job Openings & Labor Turnover Survey JOLTS – Released 7/2/2024 – The number of job openings changed little at 8.1 million on the last business day of May, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.8 million and 5.4 million, respectively. Within separations, quits (3.5 million) and discharges (1.7 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
Personal Income – Released 7/26/2024 – Personal income increased $50.4 billion (0.2 percent at a monthly rate) in May. Disposable personal income (DPI)—personal income less personal current taxes—increased $37.7 billion (0.2 percent). Personal consumption expenditures (PCE) increased $57.6 billion (0.3 percent).
Advance Estimate of 2nd Quarter 2024 GDP – Released 7/25/2024 – Real gross domestic product (GDP) increased at an annual rate of 2.8 percent in the second quarter of 2024, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.4 percent. The GDP “advance” estimate is based on source data that are incomplete or subject to further revision. The increase in real GDP primarily reflected increases in consumer spending, private inventory investment, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
Durable Goods – Released 7/25/2024 – New orders for manufactured durable goods in June, down following four consecutive months on increases, decreased $18.6 billion or 6.6 percent to $264.5 billion, the U.S. Census Bureau announced today. This followed a 0.1 percent May increase. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders decreased 7.0 percent. Transportation equipment, down two of the last three months, led the decrease, $19.6 billion or 20.5 percent to $75.8 billion. Shipments of manufactured durable goods in June, up four of the last five months, increased $3.5 billion or 1.2 percent to $288.1 billion. This followed a 0.4 percent May decrease. Transportation equipment, also up four of the last five months, drove the increase, $3.5 billion or 3.8 percent to $95.3 billion.
New Residential Sales – Released 7/24/2024 – Sales of new single‐family houses in June 2024 were at a seasonally adjusted annual rate of 617,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is 0.6 percent below the revised May rate of 621,000 and is 7.4 percent below the June 2023 estimate of 666,000. The median sales price of new houses sold in June 2024 was $417,300. The average sales price was $487,200.
Existing Home Sales – Released 7/23/2024 – Existing home sales in June decreased 5.4% from May and fell 5.4% year over year. Existing home sales decreased to 3.89 million in June seasonally adjusted. The median price of existing homes for sale increased to a record high of $426,900.
Recent Economic Data
Housing Starts– Released 7/17/2024 – June housing starts came in at 1,353,000, 3.0% above the May estimate but is 4.4% below the June 2023 rate. Building permits were 3.4% above the May rate at $1,446,000 but is 3.1% below the June 2023 rate.
Industrial Production and Capacity Utilization – Released 7/17/2024 – Industrial production increased 0.6% in June. Manufacturing increased 0.4%. Utilities output increased 2.8%. Mining increased 0.3%. Total industrial production in June was 1.6% higher than its year-earlier level. Capacity utilization increased to 78.8% in June, a rate that is 0.9% below its long-run average.
Retail Sales– Released 7/16/2024 – Headline retail sales were virtually unchanged in June and are up 2.3% above June 2023.
Producer Price Index – Released 7/12/2024 – The Producer Price Index for final demand increased 0.2 percent in June, seasonally adjusted. Final demand was unchanged in May. On an unadjusted basis, the index for final demand moved up 2.6 percent for the 12 months ended in June.
Consumer Price Index – Released 7/11/2024 – The Consumer Price Index for All Urban Consumers decreased 0.1% in June on a seasonally adjusted basis, after being unchanged in May. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment.
Consumer Credit – Released 7/8/2024 – Consumer credit increased at a seasonally adjusted annual rate of 2.7 percent in May. Revolving credit increased at an annual rate of 6.3 percent, while nonrevolving credit increased at an annual rate of 1.4 percent.
US Light Vehicle Sales– Released 7/5/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.290 million units in June.
U.S. Trade Balance – Released 7/3/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $75.1 billion in May, up $0.6 billion from $74.5 billion in April. May exports were $261.7 billion, $1.8 billion more than April exports. May imports were $336.7 billion, $1.2 billion less than April imports. The May increase in the goods and services deficit reflected an increase in the goods deficit of $0.9 billion to $100.2 billion and an increase in the services surplus of $0.3 billion to $25.1 billion.
PMI Non-Manufacturing Index – Released 7/3/2024 – Economic activity in the services sector contracted in June for the second time in three months. The Services PMI® registered 48.8 percent, 5.0 percentage lower than May’s reading of 53.8 percent.
U.S. Construction Spending– Released 7/1/2024 – Construction spending during May 2024 was estimated at a seasonally adjusted annual rate of $2,139.8 billion, 0.1 percent below the revised April estimate of $2,142.1 billion. The May figure is 6.4 percent above the May 2023 estimate of $2,011.8 billion.
PMI Manufacturing Index – Released 7/1/2024 – The June Manufacturing PMI registered 48..5 percent, down 0.2 percent from May. The manufacturing sector contracted in June for the third consecutive month and the 19th time in the last 20 months. The overall economy continued in expansion for the 50th month after one month of contraction in April 2020. The New Orders Index remained in contraction territory at 49.3 percent, 3.9 percentage points higher than the figure of 45.4 percent recorded in May. The Production Index reading of 48.5 percent is a 1.7-percentage point decrease compared to May’s figure of 50.2 percent.
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.
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.
This week we get data on Consumer Confidence, Chicago PMI, Manufacturing PMI, U.S. Construction Spending, the Employment Cost Index, JOLTS, and the July Jobs Report.
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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