US equities were slightly down for the week, though major indices recovered from worst levels after Monday’s big declines (when S&P logged its worst daily decline since September 2022; Nasdaq its worst since October 2022). The sparks began after Thursday’s (8/1) initial and continuing unemployment claims data and last Friday’s disappointing July nonfarm payrolls report. It took less than three days for the S&P 500 to log a more than 7.3% loss by the Monday morning market open. The VIX spiked to 66 on Monday before falling back to 38 to close the day. Some markets fared even worse. The Japanese Nikkei 225 fell 12.4% on Monday, its worst daily performance since Black Monday in 1987 and logged a two-day decline of 17.5%, the worst two-day return in its history after the Bank of Japan hiked rates as many central banks are beginning to or preparing to cut rates, resulting in a rapid appreciation of the Yen. Market discussions centered on soft-vs-hard landing dynamics, possible Fed responses (such as intermeeting cuts), contributing factors (such as unwinding global carry trades, specifically in the Japanese Yen), and potential depth of the drawdown continued through much of the week. But by week’s end, the S&P stood less than 6% below its 16-Jul record close after gaining back a majority of the week’s losses.
Big tech was mostly lower for the week, with META +6.1% the notable exception. However, the weakness was widespread. Underperforming groups included managed care, MedTech, biotech, homebuilders, oil services, paper/packaging, industrial metals, building products, and utilities. Among the relative outperformers were semis, software, engineering/construction, refiners, obesity pharma, hospitals, commodity chemicals, exchanges, apparel/apparel retail, casinos, telecom, andmedia.
Treasuries were weaker with a bit of curve flattening, with yields trimming last week’s big declines. The market also absorbed $125B in new issuance; but while the $52B auction of 3s was well received, there were tails for both the 10Y ($42B) and 30Y ($25B) sales. The dollar was little changed overall; DXY (0.1%). Gold was up 0.1% for the week. Oil was higher after four consecutive weeks of declines, with continued geopolitical fears in the mix. WTI crude settled up 4.5%, its best week since March.
The market this week lived in the echo of last Friday’s weaker-than-expected July payrolls report, which seemed to fan fears about a coming hard landing and a Fed well behind the curve. These fears were given loud voice in the weekend press and Monday’s global risk-off trading was conducted under that shadow, possibly exacerbated by commentary about the unwinding of yen carry trades. The VIX that day logged its largest-ever intraday jump (to a high of nearly 66) before settling above 38. But at the same time, analysts had begun to discuss the alternative scenario, where US economic growth remained solid and the jobs report could potentially be seen as reflecting transitory factors (such as weather). At the same time, there was also commentary about drawdowns as a normal feature of the equity marketsand the fact that even at Monday’s close, the S&P was only 8.5% below its record high from 16-Jul.
There was also some pushback from Fedspeak this week. Chicago’s Goolsbee was one of the first out of the gate, saying several times this week that the Fed should not overreact to a single economic release, but remain driven firmly by the totality of the data (though he also acknowledged the Fed is watching labor conditions). SF’s Daly suggested it was not time to talk about emergency rate cuts and urged patience. She argued there is much more data on the way and that labor-market strength gives the Fed confidence the economy isn’t falling off a cliff. Richmond’s Barkin made the point that disinflationary progress has given the Fed time to assess whether the economy is weakening or merely normalizing.
Friday’s payrolls report also preceded something of a bit of an economic news vacuum this week, with few major releases on the calendar. Perhaps the most important was Thursday’s initial jobless claims, which printed below consensus, declining after last week’s unexpected rise. July’s ISM Services report also came in ahead of forecasts, featuring gains for both the new orders and employment components, and respondent commentary discussing stable to strong business conditions.
Q2 earnings continued to come in, though these for the most part continued to flesh out well-understood themes, particularly corporate margin efforts to help offset revenue headwinds, as well as the challenging macro backdrop and reduced pricing power. But while the percentage of S&P companies beating earnings growth estimates has been higher than average, there has been some attention on the smaller magnitude of those beats.
While the market mood was somewhat more sanguine exiting the week than entering it, there remained a sense that challenges remain ahead. Analysts continued to point to the stressed consumer, scrutiny beginning to erode AI optimism, still-stretched systematic long positioning, valuations not far from their recent peaks, negative seasonality, geopolitical uncertainties, and a potentially high bar for a 50bp Fed cut in September (with futures pricing suggesting market sees this as a 50-50 prospect).
After a quiet week on the economic front, there will be several important releases to watch next week including July PPI (Tuesday), July CPI (Wednesday), July retail sales (Wednesday), and preliminary August UMich consumer sentiment and inflation expectations (Friday). Given recent disinflation traction, retail sales may garner the greatest focus given concerns about the consumer impulse.
The Baker Hughes rig count was up 2 this week. There are 588 oil and gas rigs operating in the US – Down 66 from last year.
Metals Complex-
Employment Picture –
Weekly Unemployment Claims – Released Thursday 8/8/2024 – In the week ending August 3, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 17,000 from the previous week’s revised level. The 4-week moving average was 240,750 an increase of 2,500 from the previous week’s revised average.
June Jobs Report – BLS Summary – Released 8/2/2024 – The US Economy added 114k nonfarm jobs in July and the Unemployment rate increased 0.2% to 4.3%. Average hourly earnings increased 8 cents to $35.07. Hiring highlights include +55k Healthcare, +25k Construction, and +14k Transportation and Warehousing.
Average hourly earnings increased 8 cents/0.2% to $35.07.
U3 unemployment rate increased 0.2% to 4.3%. U6 unemployment rate increased 0.4% to 7.8%.
The labor force participation rate was little changed at 62.7%.
Average work week declined 0.1 to 34.2 hours.
Employment Cost Index – Released 7/31/2024 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in June 2024. Wages and salaries increased 0.9% and benefit costs increased 1.0% from March 2024. The 12-month period ending in June 2024 saw compensation costs increase by 4.1. The 12-month period ending June 2023 increased 4.5%. Wages and salaries increased 4.2 percent over the 12-month period ending in June 2024 and increased 4.6 percent for the 12-month period ending in June 2023. Benefit costs increased 3.8 percent over the 12-month period ending June 2024 and increased 4.2 percent for the 12-month period ending in June 2023. This report is published quarterly.
Job Openings & Labor Turnover Survey JOLTS – Released 7/30/2024 – The number of job openings was unchanged at 8.2 million on the last business day of June, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.3 million and 5.1 million, respectively. Within separations, quits (3.3 million) and discharges (1.5 million) changed little.
This Week’s Economic Data- Blue links take you to data source
Consumer Credit – Released 8/7/2024 – Consumer credit increased at a seasonally adjusted annual rate of 2.4 percent in the second quarter and increased at 2.1 percent in June. Revolving credit increased at an annual rate of 1.2 percent, while nonrevolving credit increased at an annual rate of 2.9 percent.
U.S. Trade Balance – Released 8/6/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $73.1 billion in June, down $1.9 billion from $75.0 billion in May.June exports were $265.9 billion, $3.9 billion more than May exports. June imports were $339.0 billion, $2.0 billion more than May imports. The June decrease in the goods and services deficit reflected an decrease in the goods deficit of $2.5 billion to $97.4 billion and a decrease in the services surplus of $0.6 billion to $24.2 billion.
PMI Non-Manufacturing Index – Released 8/5/2024 – Economic activity in the services sector expanded in July for the second time in four months. The Services PMI® registered 51.4 percent, 2.6 percentage higher than June’s reading of 48.8 percent.
Recent Economic Data – Blue Links bring you to data source
US Light Vehicle Sales – Released 8/2/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.817 million units in July.
U.S. Construction Spending – Released 8/1/2024 – Construction spending during June 2024 was estimated at a seasonally adjusted annual rate of $2,148.4 billion, 0.3 percent below the revised May estimate of $2,154.8 billion. The June figure is 6.2 percent above the June 2023 estimate of $2,023.0 billion.
PMI Manufacturing Index – Released 8/1/2024 – The July Manufacturing PMI registered 46.8 percent, down 1.7 percent from 48.5 percent in June. The manufacturing sector contracted in July for the fourth consecutive month and the 20th time in the last 21 months. The overall economy continued in expansion for the 51st month after one month of contraction in April 2020. The New Orders Index remained in contraction territory at 47.4 percent, 1.9 percentage points lower than the figure of 49.3 percent recorded in June. The Production Index reading of 45.9 percent is a 2.6-percentage point decrease compared to June’s figure of 48.5 percent.
Chicago PMI – Released 7/31/2024 – Chicago PMI remained in contraction territory in July and decreased to 45.3 points down from 47.4 points in June. The latest reading indicated that Chicago’s economic activity contracted for the eighth consecutive month in July.
Consumer Confidence – Released 7/30/2024 – Consumer Confidence increased from 97.8 to 100.3 in July. The expectations index improved from 72.8 to 78.2. The Expectations Index has been below 80 (the threshold which usually signals a recession ahead) for six consecutive months. Confidence increased in July, but not enough to break free of the narrow range that has prevailed over the past two years. Consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future. Compared to last month, consumers were somewhat less pessimistic about the future. Expectations for future income improved slightly, but consumers remained generally negative about business and employment conditions ahead.
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.
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.
This week we get data on CPI, PPI, Retail Sales, Industrial Production and Capacity Utilization, and Housing Starts.
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 32, 2024
US equities were slightly down for the week, though major indices recovered from worst levels after Monday’s big declines (when S&P logged its worst daily decline since September 2022; Nasdaq its worst since October 2022). The sparks began after Thursday’s (8/1) initial and continuing unemployment claims data and last Friday’s disappointing July nonfarm payrolls report. It took less than three days for the S&P 500 to log a more than 7.3% loss by the Monday morning market open. The VIX spiked to 66 on Monday before falling back to 38 to close the day. Some markets fared even worse. The Japanese Nikkei 225 fell 12.4% on Monday, its worst daily performance since Black Monday in 1987 and logged a two-day decline of 17.5%, the worst two-day return in its history after the Bank of Japan hiked rates as many central banks are beginning to or preparing to cut rates, resulting in a rapid appreciation of the Yen. Market discussions centered on soft-vs-hard landing dynamics, possible Fed responses (such as intermeeting cuts), contributing factors (such as unwinding global carry trades, specifically in the Japanese Yen), and potential depth of the drawdown continued through much of the week. But by week’s end, the S&P stood less than 6% below its 16-Jul record close after gaining back a majority of the week’s losses.
Big tech was mostly lower for the week, with META +6.1% the notable exception. However, the weakness was widespread. Underperforming groups included managed care, MedTech, biotech, homebuilders, oil services, paper/packaging, industrial metals, building products, and utilities. Among the relative outperformers were semis, software, engineering/construction, refiners, obesity pharma, hospitals, commodity chemicals, exchanges, apparel/apparel retail, casinos, telecom, andmedia.
Treasuries were weaker with a bit of curve flattening, with yields trimming last week’s big declines. The market also absorbed $125B in new issuance; but while the $52B auction of 3s was well received, there were tails for both the 10Y ($42B) and 30Y ($25B) sales. The dollar was little changed overall; DXY (0.1%). Gold was up 0.1% for the week. Oil was higher after four consecutive weeks of declines, with continued geopolitical fears in the mix. WTI crude settled up 4.5%, its best week since March.
The market this week lived in the echo of last Friday’s weaker-than-expected July payrolls report, which seemed to fan fears about a coming hard landing and a Fed well behind the curve. These fears were given loud voice in the weekend press and Monday’s global risk-off trading was conducted under that shadow, possibly exacerbated by commentary about the unwinding of yen carry trades. The VIX that day logged its largest-ever intraday jump (to a high of nearly 66) before settling above 38. But at the same time, analysts had begun to discuss the alternative scenario, where US economic growth remained solid and the jobs report could potentially be seen as reflecting transitory factors (such as weather). At the same time, there was also commentary about drawdowns as a normal feature of the equity marketsand the fact that even at Monday’s close, the S&P was only 8.5% below its record high from 16-Jul.
There was also some pushback from Fedspeak this week. Chicago’s Goolsbee was one of the first out of the gate, saying several times this week that the Fed should not overreact to a single economic release, but remain driven firmly by the totality of the data (though he also acknowledged the Fed is watching labor conditions). SF’s Daly suggested it was not time to talk about emergency rate cuts and urged patience. She argued there is much more data on the way and that labor-market strength gives the Fed confidence the economy isn’t falling off a cliff. Richmond’s Barkin made the point that disinflationary progress has given the Fed time to assess whether the economy is weakening or merely normalizing.
Friday’s payrolls report also preceded something of a bit of an economic news vacuum this week, with few major releases on the calendar. Perhaps the most important was Thursday’s initial jobless claims, which printed below consensus, declining after last week’s unexpected rise. July’s ISM Services report also came in ahead of forecasts, featuring gains for both the new orders and employment components, and respondent commentary discussing stable to strong business conditions.
Q2 earnings continued to come in, though these for the most part continued to flesh out well-understood themes, particularly corporate margin efforts to help offset revenue headwinds, as well as the challenging macro backdrop and reduced pricing power. But while the percentage of S&P companies beating earnings growth estimates has been higher than average, there has been some attention on the smaller magnitude of those beats.
While the market mood was somewhat more sanguine exiting the week than entering it, there remained a sense that challenges remain ahead. Analysts continued to point to the stressed consumer, scrutiny beginning to erode AI optimism, still-stretched systematic long positioning, valuations not far from their recent peaks, negative seasonality, geopolitical uncertainties, and a potentially high bar for a 50bp Fed cut in September (with futures pricing suggesting market sees this as a 50-50 prospect).
After a quiet week on the economic front, there will be several important releases to watch next week including July PPI (Tuesday), July CPI (Wednesday), July retail sales (Wednesday), and preliminary August UMich consumer sentiment and inflation expectations (Friday). Given recent disinflation traction, retail sales may garner the greatest focus given concerns about the consumer impulse.
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 up 2 this week. There are 588 oil and gas rigs operating in the US – Down 66 from last year.
Metals Complex-
Employment Picture –
Weekly Unemployment Claims – Released Thursday 8/8/2024 – In the week ending August 3, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 17,000 from the previous week’s revised level. The 4-week moving average was 240,750 an increase of 2,500 from the previous week’s revised average.
June Jobs Report – BLS Summary – Released 8/2/2024 – The US Economy added 114k nonfarm jobs in July and the Unemployment rate increased 0.2% to 4.3%. Average hourly earnings increased 8 cents to $35.07. Hiring highlights include +55k Healthcare, +25k Construction, and +14k Transportation and Warehousing.
Employment Cost Index – Released 7/31/2024 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in June 2024. Wages and salaries increased 0.9% and benefit costs increased 1.0% from March 2024. The 12-month period ending in June 2024 saw compensation costs increase by 4.1. The 12-month period ending June 2023 increased 4.5%. Wages and salaries increased 4.2 percent over the 12-month period ending in June 2024 and increased 4.6 percent for the 12-month period ending in June 2023. Benefit costs increased 3.8 percent over the 12-month period ending June 2024 and increased 4.2 percent for the 12-month period ending in June 2023. This report is published quarterly.
Job Openings & Labor Turnover Survey JOLTS – Released 7/30/2024 – The number of job openings was unchanged at 8.2 million on the last business day of June, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.3 million and 5.1 million, respectively. Within separations, quits (3.3 million) and discharges (1.5 million) changed little.
This Week’s Economic Data- Blue links take you to data source
Consumer Credit – Released 8/7/2024 – Consumer credit increased at a seasonally adjusted annual rate of 2.4 percent in the second quarter and increased at 2.1 percent in June. Revolving credit increased at an annual rate of 1.2 percent, while nonrevolving credit increased at an annual rate of 2.9 percent.
U.S. Trade Balance – Released 8/6/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $73.1 billion in June, down $1.9 billion from $75.0 billion in May.June exports were $265.9 billion, $3.9 billion more than May exports. June imports were $339.0 billion, $2.0 billion more than May imports. The June decrease in the goods and services deficit reflected an decrease in the goods deficit of $2.5 billion to $97.4 billion and a decrease in the services surplus of $0.6 billion to $24.2 billion.
PMI Non-Manufacturing Index – Released 8/5/2024 – Economic activity in the services sector expanded in July for the second time in four months. The Services PMI® registered 51.4 percent, 2.6 percentage higher than June’s reading of 48.8 percent.
Recent Economic Data – Blue Links bring you to data source
US Light Vehicle Sales – Released 8/2/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.817 million units in July.
U.S. Construction Spending – Released 8/1/2024 – Construction spending during June 2024 was estimated at a seasonally adjusted annual rate of $2,148.4 billion, 0.3 percent below the revised May estimate of $2,154.8 billion. The June figure is 6.2 percent above the June 2023 estimate of $2,023.0 billion.
PMI Manufacturing Index – Released 8/1/2024 – The July Manufacturing PMI registered 46.8 percent, down 1.7 percent from 48.5 percent in June. The manufacturing sector contracted in July for the fourth consecutive month and the 20th time in the last 21 months. The overall economy continued in expansion for the 51st month after one month of contraction in April 2020. The New Orders Index remained in contraction territory at 47.4 percent, 1.9 percentage points lower than the figure of 49.3 percent recorded in June. The Production Index reading of 45.9 percent is a 2.6-percentage point decrease compared to June’s figure of 48.5 percent.
Chicago PMI – Released 7/31/2024 – Chicago PMI remained in contraction territory in July and decreased to 45.3 points down from 47.4 points in June. The latest reading indicated that Chicago’s economic activity contracted for the eighth consecutive month in July.
Consumer Confidence – Released 7/30/2024 – Consumer Confidence increased from 97.8 to 100.3 in July. The expectations index improved from 72.8 to 78.2. The Expectations Index has been below 80 (the threshold which usually signals a recession ahead) for six consecutive months. Confidence increased in July, but not enough to break free of the narrow range that has prevailed over the past two years. Consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future. Compared to last month, consumers were somewhat less pessimistic about the future. Expectations for future income improved slightly, but consumers remained generally negative about business and employment conditions ahead.
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.
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.
This week we get data on CPI, PPI, Retail Sales, Industrial Production and Capacity Utilization, and Housing Starts.
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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