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.

 

Index Started Week Ended Week Change Change % YTD %
DJIA 24,456.48 25,019.41 562.93 2.30% 1.21%
Nasdaq 7,688.39 7,825.98 137.59 1.79% 13.36%
S&P 500 2,759.82 2,801.31 41.49 1.50% 4.78%
Russell 2000 1,694.05 1,687.08 -6.97 -0.41% 9.87%

 

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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