Equities generally closed lower by the end of the week with, the Nasdaq and the Dow falling furthest among the major stock benchmark indexes. The Russell 2000 and the Global Dow were flat. Traders spent the week assessing the first-quarter gross domestic product, jobless claims, and corporate earnings data. Ten-year Treasury yields rose as bond prices dipped, on hawkish comments from Federal Reserve officials and a weaker Treasury auction. Crude oil prices dipped and prices at the pump dipped lower. Utilities led the market sectors, with energy and real estate outperforming. Health care, industrials, and information technology closed in the red.
Last Week’s Economic News
- Gross domestic product increased at an annual rate of 1.3% in the first quarter of 2024, according to the second estimate from the Bureau of Economic analysis. In the fourth quarter, GDP rose 3.4%. April’s initial, or advance, estimate showed first-quarter GDP rose 1.6%. A downward revision to consumer spending largely accounted for the decrease. Compared to the fourth quarter, the personal consumption expenditures (PCE) price index increased 3.3%, a downward revision of 0.1 percentage point. Excluding food and energy prices, the PCE price index increased 3.6%, a downward revision of 0.1 percentage point. In the first quarter, consumer spending rose 2.0%, nonresidential fixed investment advanced 3.3%, and residential fixed investment climbed 15.4%. Exports increased 1.2%, while imports, which are a negative in the calculation of GDP, increased 7.7%.
- Personal income advanced 0.3% in April, while disposable (after-tax) income rose 0.2%. Consumer spending slowed significantly in April, falling from 0.7% in both February and March, to 0.2% in April. Consumer prices for goods and services increased 0.3% in April for the third consecutive month. Excluding food and energy, prices rose 0.2%. Since April 2023, consumer prices advanced 2.7%, unchanged from the previous 12-month period. Prices less food and energy climbed 2.8%.
- The international trade in goods deficit was $99.4 billion in April, up $7.1 billion from $92.3 billion in March. Exports of goods for April were $169.9 billion, $0.9 billion more than March exports. Imports of goods for April were $269.3 billion, $8.0 billion more than March imports.
- The national average retail price for regular gasoline was $3.577 per gallon on May 27.
- For the week ended May 25, there were 219,000 new claims for unemployment insurance, an increase of 3,000 from the previous week’s level.
Eye on the Week Ahead
The manufacturing and services surveys for May are out this week. April saw growth in both sectors slow. The employment figures for May are also available this week. April saw a significant downturn in the number of new jobs added, leading to guarded optimism that the Fed may be more inclined to lower interest rates.
Have a nice week!
Sincerely,
Robert G. Carpenter