The U.S. stock market ended the week lower as Federal Reserve officials reported that they would only cut interest rates by a quarter of a percent, as opposed to the half of a percent expected.  That said, interest rates moved lower with the benchmark 10-year treasury yield falling from 2.10% a week ago to 2.05% today.  The spread between the 10-year yield and the 2-year treasury yield was little changed on the week, but remains historically very narrow at 0.27%.  The price of gold rose by 0.6% to $1,426 an ounce amid hope of a rate cut.  The U.S. dollar index (DXY), which typically moves inversely to the price of gold, rose from 96.82 a week ago to 97.15 today amid better than expected retail sales data.  The price of crude oil fell by 7.7% to $55.68 a barrel as slowing demand and oversupply of the finite resource holds the price down.

This Week’s Economic Highlights

• June marked the fourth consecutive rise in retail sales as it increased by a strong 0.4%.  Excluding gasoline sales, which recognized a big drop, retail sales rose by an even stronger 0.7%.

• Industrial Production continues to show signs of slowing as it saw no growth in the month of June.  Since the beginning of 2019 industrial production has fallen by over 3.0%, bringing its year-over-year growth rate to a relatively low 1.3%.

• U.S. housing starts fell by 0.9% in June to a seasonally-adjusted annualized rate of 1.25 million.  Meanwhile U.S. housing permits, a leading indicator of housing starts, fell by a more drastic 6.1% to a seasonally-adjusted annualized rate of 1.22 million (it’s lowest since the middle of 2017).

• Initial unemployment claims rose by 8,000 to 216,000 for the week ending July 13^th, while its more stable four-week average fell by 250 to 218,750.  Continuing unemployment claims, which lag initial claims by a week, fell by 42,000 to 1.69 million.  Both initial and continuing unemployment claims are near all-time lows.

• After falling to 0.3 in June, the Philly Fed manufacturing index rebounded back to 21.8 in July.  (Any reading above 0 indicates improving manufacturing business conditions.)

Quote

“A great way to lose money in financial markets is to play the same game as everyone else.”

– Brett Steenbarger

 

Important Disclosures:  Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly from The Market Commentator℠, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio.  Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in The Market Commentator℠ serves as the receipt of, or as a substitute for, personalized investment advice from The Milwaukee Company™.

In addition, The Market Commentator℠ may contain links to articles or other information that are contained on a third-party website.  The Milwaukee Company does not endorse or accept responsibility for the content, or the use, of the website.  The Milwaukee Company assumes no liability for any inaccuracies, errors or omissions in or from any data or other information provided on the pages.  Thank you.