The U.S. stock market finished the week lower after President Trump threatened to increase tariffs on $200 billion of Chinese goods from 10% to 25%.  Interest rates also moved lower as the 10-year treasury yield fell from 2.53% to 2.45%.  Meanwhile, the spread between the 10-year treasury yield and the 2-year treasury yield grew narrower as it dropped from 0.21% to 0.19%.  The price of gold increased by 0.49% to $1,287 an ounce as the haven received support from Trump’s tariffs.  Consequently, the U.S. dollar index (DXY), which typically moves inversely to the price of gold, dropped from 97.48 to 97.32.  The price of crude oil finished the week slightly lower as it dropped 0.48% to $61.56 a barrel.

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

  • Initial unemployment claims fell by 2,000 to 228,000 for the week ending May 4th.  However, the more stable four-week average of initial claims rose 7,750 to 220,250 after spiking 37,000 two weeks ago.  Continuing unemployment claims, which lag initial claims by a week, rose by 12,000 to 1.68 million.
  • The U.S. trade deficit widened slightly in March as it increased from $49.3 billion to $50.0 billion.  More specifically, U.S. imports increased by 1.1% to $262 billion while exports increased by a small 1.0% to $212 billion.
  • The producer price index (PPI), a measure of wholesale inflation, increased by 0.2% in April and 2.2% over the past year.  Core PPI, which excludes the volatile food and energy prices, increased by a more significant 0.4% in April yet over the past year has also increased by 2.2%.
  • The consumer price index (CPI), a measure of retail inflation, increased by 0.3% in April and 2.0% over the past year.  Core CPI, which excludes the volatile food and energy prices, increased by a more moderate 0.1% in April and 2.1% over the past year.

Quote

“Please remember that what made you great is not appropriate for the next generation.”

– Richard Hamming

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