|Week Close: |
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.
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).