Major U.S. stock indices finished the week higher with the tech heavy Nasdaq jumping over 2.00% as Amazon, Alphabet, and Apple rallied. Interest rates were little changed with the 10-year treasury yield rising 2 basis points to 2.85%. The spread between the 10-year treasury yield and the 2-year treasury yield remained unchanged, settling at a narrow 0.22%. Commodity prices were mixed, with the price of gold dropping 0.43% to $1,206.30 an ounce and the price of crude oil rising 1.91% to $69.90 a barrel. The U.S. dollar index was virtually unchanged dropping from 95.13 to 95.08.
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THIS WEEK’S HIGHLIGHTS
- The U.S. trade deficit in goods grew by a deeper than expected $3.9 billion in July, reaching a total of $72.2 billion. The increase in the deficit was primarily attributed to a 1.70% drop in exports, for a total of $140 billion. However, imports also added to the deficit as they rose by 0.90% to a total of $212.2 billion.
- GDP for the second quarter of 2018 grew at an annualized rate of 4.2%, slightly higher than the first quarter’s annualized growth rate of 4.1%. Consumer spending, which makes up roughly 70% of GDP, grew at an annualized rate of 3.80% in the second quarter, slowing down from first quarter’s growth rate of 4.00%.
- Initial unemployment claims rose by 3,000 for the week ending August 25th, to a total of 213,000. However, the less volatile 4-week average of initial unemployment claims dropped by 1,500 to a total of 212,250. Continuing unemployment claims fell by 20,000 to 1.71 million, bringing its 4-week average down 5,000 to a total of 1.73 million.
- Personal income rose 0.30% in July while consumer spending rose 0.40%, both in line with expectations. The personal consumption expenditure (PCE) index, a measure of inflation, rose by 0.10% in July for a year-over-year change of 2.30%. Core PCE, which excludes the volatile food and energy components, rose by 0.2% in July for a year-over-year change of 2.0%
QUOTE OF THE WEEK
“He is rich or poor according to what he is, not according to what he has.”
– Henry Ward Beecher
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