Weekly Economic Update
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July 7, 2014
DOW TOPS 17,000 AFTER TERRIFIC JOBS REPORT
America’s jobless rate is fast approaching the Federal Reserve’s 6% target. Thanks to employers adding 288,000 new hires, unemployment dropped 0.2% to 6.1% in June. The U-6 rate (unemployed + underemployed) declined to 12.1%, a low unseen since October 2008; from June 2013 to June 2014, the number of Americans out of work for more than six months shrank by 1.2 million. The news helped inspire a rally: at the closing bell Friday, the Dow settled at a new all-time high of 17,068.26.1,2
ISM INDICES SINK SLIGHTLY
The Institute for Supply Management’s latest factory sector and service sector PMIs didn’t quite meet expectations, but they were still well above 50 (the demarcation between sector growth and contraction). ISM’s manufacturing PMI came in at 55.3 for June, ticking down 0.1 points from May; its non-manufacturing PMI had a June reading of 56.0 compared to May’s 56.3 mark. Economists polled by MarketWatch had forecast June’s ISM factory PMI to hit 55.7 and expected no change in its service sector PMI. Factory orders also decreased in May, as the Federal Reserve reported an 0.5% retreat following the 0.8% rise in April.3
PENDING HOME SALES JUMP 6.1%
The May gain was the greatest monthly improvement noted by the National Association of Realtors since April 2010 (when the first-time buyer tax credit was set to expire). Analysts polled by Bloomberg believed May would bring a gain of 1.5%.4
NEW QUARTER, NEW GAINS
With a 2.00% rise across four trading days to 4,485.92, the Nasdaq set the pace for the big three U.S. indices last week. The Dow gained 1.28% on its way to Friday’s record close, and the S&P 500 added 1.25% during the week to settle at 1,985.44 on July 3.5
THIS WEEK: No economic reports or earnings releases are scheduled for Monday, but results from Alcoa and The Container Store kick off the Q2 earnings season on Tuesday. Minutes from the June Fed policy meeting arrive Wednesday. Thursday, earnings from Progressive and Family Dollar complement the latest initial claims numbers and the Census Bureau’s report on May wholesale inventories. Friday brings Q2 results from Fastenal and Wells Fargo.
Sources: USATODAY.com, bigcharts.com, treasury.gov - 7/3/142,6,7,8
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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
1 - blogs.wsj.com/economics/2014/07/03/highlights-from-the-june-u-s-jobs-report/ [7/4/14]
2 - usatoday.com/money/markets/overview/ [7/3/14]
3 - marketwatch.com/economy-politics/calendars/economic [7/3/14]
4 - latimes.com/business/realestate/la-fi-re-pending-home-sales-20140630-story.html [6/30/14]
5 - fxstreet.com/news/forex-news/article.aspx?storyid=ccbc855f-185e-4d6e-8d31-b4e88e1607e1 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F3%2F13&x=0&y=0 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F3%2F13&x=0&y=0 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F3%2F13&x=0&y=0 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F2%2F09&x=0&y=0 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F2%2F09&x=0&y=0 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F2%2F09&x=0&y=0 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F2%2F04&x=0&y=0 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F2%2F04&x=0&y=0 [7/3/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F2%2F04&x=0&y=0 [7/3/14]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/3/14]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/3/14]
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