The U.S. stock market finished the week mostly higher as overall positive corporate earnings and better than expected economic data drove major U.S. stock indexes to all-time highs (other than the DJIA).  Interest rates dropped amid better than expected GDP data as the 10-year treasury yield fell from 2.56% to 2.50%.  The spread between the 10-year treasury yield and the 2-year treasury yield widened by 2 basis points to 0.21%.  The price of gold increased by 0.81% to $1,288.20 an ounce, which can also be attributed to the better than expected GDP data.  However, the U.S. Dollar Index (DXY), which typically moves inversely to the price of gold, increased from 97.40 to 98.03 as its depreciating peers outweighed the headwinds of positive economic data.  The price of crude oil fell 1.82% to $62.83 a barrel after President Trump said that he “called up” OPEC and told them oil prices need to come down, however OPEC has denied discussing this.

Index               Started Week         Ended Week         Change         Change %         YTD %
DJIA 25,942.3725,764.00-178.37-0.69%10.44%
Nasdaq 7,916.947,816.28-100.66-1.27%17.80%
S&P 500 2,881.402,859.53-21.87-0.76%14.07%
Russell 2000 1,572.991,535.76-37.23-2.37%13.88%

This Week’s Economic Highlights

  • After surging 11.8% in February, existing home sales fell 4.9% in March to a seasonally-adjusted annual rate of 5.21 million.  Over the trailing twelve months existing home sales are still down 5.4%.  The median price of existing homes sold in March was $259,400, which is up 3.9% from a year ago.
  • Contrary to existing home sales, new home sales jumped 4.5% in March to a seasonally-adjusted annual rate of 692,000.  Year-over-year new home sales are up 3.0%, however the median sales price is down 9.7% to $302,700.
  • After reaching near all-time lows the week prior, initial unemployment claims spiked by 37,000 to a total of 230,000 for the week ending April 20th.  However, its less volatile four-week moving average only increased by 4,500 to 206,000.  Continuing unemployment claims, which lag initial claims by a week increased by a very moderate 1,000 to 1.66 million.
  • Durable goods orders rose by 2.7% for the month of March as demand for transportation goods (i.e. automobiles, planes etc.) spiked.  However, transportation goods tend to add volatility to durable goods due to their inconsistent demand from month to month.  That said, when excluding transportation orders, durable goods orders still rose a strong 1.3%.
  • For the first quarter of 2019, U.S. gross domestic product (GDP) grew at a relatively strong annual rate of 3.2%.  The largest factors driving GDP higher were a 3.2% increase in government spending as well as strong increases in inventory and trade.

Quote

“There is nothing reliable to be learned about making money.  If there were, study would be intense, and everyone with a positive IQ would be rich.”

– John Kenneth Galbraith

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