The Market Week in Review

 

The stock market finished the week mixed as investors continue to digest earnings reports and conflicting economic data.  The tech-heavy Nasdaq index dropped over 1.0% largely due to Facebook stock dropping nearly 20% on lower than expected revenue and a poor outlook.  Interest rates rose with the 10-year treasury yield rising 7 basis points to 2.96%.  Yet, the spread between the 10-year treasury yield and the 2-year treasury yield only widened by 1 basis point to 0.29% as short-term yields also rose.  Commodity prices moved lower with the price of gold dropping 0.64% to $1,222.80 an ounce and crude oil dropping 1.85% to $69.01 a barrel.  The U.S. dollar index finished slightly higher, rising from 94.44 to 94.67.

 

Index Started Week Ended Week Change Change % YTD %
DJIA 25,058.12 25,451.06 392.94 1.57% 2.96%
Nasdaq 7,820.20 7,737.42 -82.78 -1.06% 12.08%
S&P 500 2,801.83 2,818.82 16.99 0.61% 5.43%
Russell 2000 1,696.81 1,663.34 -33.47 -1.97% 8.32%

 

THIS WEEK’S HIGHLIGHTS

 

  • U.S. existing home sales fell by 0.6% in June to an annualized rate of 5.38 million, marking the third consecutive drop in sales. Additionally, a shortage of properties on the market continues to drive up the prices of homes to a record high median price of $276,900.

 

  • U.S. new home sales also dropped in June but by a larger margin then existing home sales, falling 5.3% to an annualized rate of 631,000. However, supply of new homes rose by 1.7% to 301,000 new homes on the market.

 

  • Durable goods orders surged 1.0% in June, lifted by a sharp rise in the heavily weighted aircraft sector which rose 15.7%. Excluding the heavily weighted transportation sector (which includes aircrafts), durable goods orders still rose a moderate 0.4%.

 

  • The goods portion of the international trade deficit grew deeper than expected, increasing from $64.8 billion in May to $68.3 billion in June. The increase in the deficit came from a 1.5% drop in exports to $141.9 billion, and a 0.6% increase in imports to $210.3 billion.

 

  • Initial unemployment claims remain very low at 217,000 despite rising by 9,000 for the week ending July 21st. The less volatile 4-week average of initial unemployment claims dropped by nearly 3,000 to 218,000.  Continuing unemployment claims fell by 8,000 to 1.74 million, however its 4-week average rose by 10,000 to 1.75 million.

 

  • Second quarter GDP rose significantly higher to a 4.1% annualized growth rate, coming off the first quarter’s rate of 2.0%. A 4.0% increase in consumer spending largely drove the rise in GDP as it accounts for roughly 2.7% of the 4.1% annualized growth rate.  Net exports also contributed to a significant amount of second quarter GDP, accounting for approximately 1.1% of the 4.1% annualized growth rate.

 

QUOTE OF THE WEEK

“If money is your hope for independence you will never have it.  The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.”

– Henry Ford

 

 

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™.  Thank you.

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