Both the S&P 500 and the Nasdaq advanced for the fourth straight week, which is the first time that has happened since February. Not to be outdone, the Dow advanced for a fifth straight week. Much of the week’s focus was on inflation data (see below). Traders will now look to responsive comments from Federal Reserve officials for any potential changes in interest rate expectations. Information technology and real estate led the market sectors, while consumer discretionary and industrials closed in the red. The dollar slipped nearly 0.75% against a basket of currencies. Gold prices advanced over 2.0% for the week and nearly 17.0% for the year. Crude oil prices climbed more than $1.00 per barrel.
Last Week’s Economic News
- Consumer prices rose in April after rising in March. Over the last 12 months, consumer prices were up 3.4%.
- Inflationary pressures were evident at the producer level, where April’s increase exceeded expectations. For the year, producer prices have risen 2.2%, the largest increase in a year.
- Retail and food services sales were unchanged in April after increasing 0.6% in March. Over the last 12 months, retail sales rose 3.0%.
- Import prices increased in April, after also advancing in March. The April increase in import prices was the largest one-month advance since March 2022. Over the last 12 months, import prices advanced 1.1%, the largest 12-month increase since December 2022. Prices for exports increased 0.5% in April following a 0.1% advance the previous month. Export prices have not decreased on a monthly basis since December 2023. Despite the recent increases, export prices declined 1.0% over the past year, the smallest over-the-year drop since February 2023.
- Total industrial production was unchanged in April from March.
- The number of residential building permits issued in April declined from the March estimate and 2.0% below the April 2023 rate.
- The national average retail price for regular gasoline was $3.608 per gallon on May 13, $0.072 per gallon more than a year ago.
- For the week ended May 11, there were 222,000 new claims for unemployment insurance, a decrease of 10,000 from the previous week’s level.
Eye on the Week Ahead
This week, the April data on sales of existing homes and new homes is released. March saw sales of existing homes decline, helping to draw sales down 3.7% over the last 12 months. New home sales advanced in March and are up over 8.0% for the year.
Have a nice week!
Sincerely,
Robert G. Carpenter