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M Notes:  Tue, 6-1 Thumbnail

M Notes: Tue, 6-1




Week Close:
 5-28
+ (-)%
May
%
Dow
34,531
+323
+0.9%
+1.9%
S&P
4,204
+48
+1.2
+0.6%
Nasdaq
13,749
+278
+2.1%
-1.5%
10-year1.58-0.04-2.5%-4.2%


LAST WEEK:

Markets:  They were up for the week and mixed for the month of May.

The S&P roller coaster last week: up, down, up, up a little and up a little.

Durable goods:  They disappointed.  The prior read was +0.5%.  Expectations were for a +0.7% number.  The actual number came in at -1.3%.

GDP:  The second read for Q1 GDP came out last Thursday.  The first read came in at +6.4%.  Expectations were for the number to increase slightly up to +6.5%.   The actual number came in at unchanged at +6.4%.

Housing:   New home sales were down -5.9% in April but are up +48% YOY.

Inflation:  The inflation number that’s the Federal Reserve’s target is 2.0%.  Last Friday we got an update on the metric the Fed watches… the PCE index.  It’s a bit broader than the PPI index (wholesale inflation… now at 6.2%) and the CPI (consumer inflation… now at 4.2%).  The PCE moved from 2.3% up to 3.6%.  The Fed is “averaging” their target now.  If you take the January PCE # (1.4%) and average that out… you get 2.5%.  That’s obviously well above 2.0%.  The question now is… how hot will the Fed allow the economy to run (before they do something about it) ?

Jobless claims:  Wow.  Consensus was for 450,000 claims.  The actual weekly number came in at 406,000.  Context:   pre-Covid the weekly average was around 200,000.  We finally got below 1,000,000 consistently in January.  The January average was 875,000/wk.  In March we averaged 728,000/wk.  In May we averaged 455,000/wk.  Imagine what the number will be in September/October.

Radio:  Bill was off last Friday.  But you can listen to us chat this Friday at 6:38a, 7:38a, and 8:38a.  

Trade deficit:  Last month’s read came in at -$90.6 billion.  This month’s read (for April) came in at -$85.2 billion.  

  

 

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THIS WEEK:

Focus of the week   Coming out of the holiday weekend, Markets have been a little choppy.   Last night futures were a touch negative but turned positive this morning.  The S&P opened up +30 in the first ten minutes of trading today.  But as I write this the S&P is up just 1-2 points.  There is a lot of economic data reporting this week (see below).  However, the focus will be on the new jobs and unemployment data that comes out on Friday morning. 

Holiday:  U.S. markets were closed for the Memorial Day on Monday.    

Earnings season is just about done.  A couple companies reporting this week:  Hewlett Packard, and Smucker. 

Indicator focus:  ISM manufacturing index (Tue); motor vehicle sales, ADP employment report, Beige Book (Wed); ISM services index, jobless claims (Thu), factory orders, and the latest jobs and unemployment numbers (Fri).