Wall Street rebounded after a rough start to the month to close out its best week of the year. Traders saw a lot of economic data that did little to change the expectations of an interest rate reduction in September. Last week’s gains ended four straight weeks of losses, fueled by concerns that the Federal Reserve hadn’t lowered interest rates soon enough to prevent a major economic slowdown. However, favorable inflation data, robust retail sales, and fewer unemployment claims reassured traders’ confidence, leading to a market rally. Major benchmark stock indexes closed the week higher. All 11 of the S&P 500 market sectors gained ground, with information technology climbing more than 8.0%. Ten-year Treasury yields dipped lower as bond values advanced. Crude oil prices inched lower. The dollar declined while gold prices increased.
Last Week’s Economic News
- The Consumer Price Index rose in July, in line with expectations.
- Producer prices edged up in July after also increasing in June.
- Retail sales rose in July after declining in June. Retail sales advanced for the 12 months ended in July.
- Prices for imports ticked up in July, after being unchanged the previous month.
- Industrial production fell in July after increasing in June.
- The Treasury budget deficit for July was $243.7 billion, well above the June deficit of 71.0 billion.
- In July, the number of issued building permits for residential construction decreased from the June estimate, and 7.0% below the July 2023 rate.
- The national average retail price for regular gasoline was $3.414 per gallon on August 12.
- For the week ended August 10, there were 227,000 new claims for unemployment insurance.
Eye on the Week Ahead
The real estate sector dominates the economic data released this week. Sales of both existing and new homes will look to rebound from a period of declining sales.
Have a nice week!
Sincerely,
Robert G. Carpenter