The overall stock market finished significantly higher on the week as trade fears eased and earnings season kicked off. Interest rates were unchanged from the week prior with the 10-year treasury yield holding its position at 2.83%. However, the spread between the 2-year treasury yield and the 10-year treasury yield continues to flatten, dropping 4 basis points to a very concerning spread of 0.25%. A rise in inflationary data pushed gold prices lower with the price per ounce dropping 1.14% to $1,241.50. Crude oil prices dropped 4.55% on the week to $70.57 a barrel amid expectations of rising output in Libya. The U.S. dollar index rose to 94.69 from last week’s reading of 94.00.
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THIS WEEK’S HIGHLIGHTS
- U.S. job openings fell to 6.64 million in May after reaching a record high 6.84 million in June. U.S. hiring climbed from 5.58 million to 5.75 million, while the number of layoffs declined from 1.73 million to 1.59 million.
- Producer prices rose by 0.3% in June amid increases in the cost of services and motor vehicles. The rise in producer prices resulted in a year-over-year change of 2.8%, its largest gain in six and a half years. Producer prices, excluding the more volatile food and energy components, also resulted in a 0.3% increase in June, however it is at a 2.7% year-over-year change.
- Consumer prices rose by 0.1% in June and resulted in its largest year-over-year change in 6 years of 2.9%. Excluding the more volatile food and energy components, consumer prices rose 0.2% for the month of June and 2.3% year-over-year.
- After trending higher the past couple weeks, initial unemployment claims dropped by a significant 18,000 to 214,000 total claims. The less volatile 4-week average of initial unemployment claims also dropped by a moderate 1,500 to 223,000. Continuing unemployment claims also edged lower, dropping by 3,000 to 1.74 million.
QUOTE OF THE WEEK
“I view diversification not only as a survival strategy but as an aggressive strategy, because the next windfall might come from a surprising place. I want to make sure I’m exposed to it.”
– Peter Bernstein
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