Tech shares, particularly AI stocks, helped push the Nasdaq, and to a much lesser extent, the S&P 500 higher last week. The Dow, the Russell 2000, and the Global Dow declined. During a week when volume was relatively light, traders latched onto favorable corporate earnings data from some major tech and AI companies. Among the market sectors, only information technology and communication services closed higher. Real estate and energy fell the furthest. Treasury yields inched higher, while crude oil prices fell 2.74%, yet remain up 9.1% year to date. Gold prices, which had been soaring, had their worst week in a while, although they are up nearly 13.0% from the beginning of the year.
Last Week’s Economic News
- April saw sales of existing homes decrease from the prior month’s estimate. Total inventory sits at a 3.5-month supply, up from March. The median existing home price in April was $407,600 ($392,900 in March), an increase from the previous year ($385,800). Single-family home sales fell in April and from a year earlier. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.02% as of May 16, up from 6.39% one year ago.
- Sales of new single-family houses in April were below the March rate and 7.7% under the April 2023 estimate.
- New orders for manufactured durable goods rose for the third straight month after increasing 0.7% in April. Since April 2023, new orders for durable goods have increased 0.5%.
- The national average retail price for regular gasoline was $3.584 per gallon on May 20.
- For the week ended May 18, there were 215,000 new claims for unemployment insurance.
Eye on the Week Ahead
There are some important economic reports released during the holiday-shortened week. The second estimate of gross domestic product for the first quarter is out this week. The initial estimate showed economic growth slowed to an annual rate of 1.6%. Also available this week is the latest report on personal income and outlays. The previous report showed consumer spending rose 0.8% in March, while consumer prices advanced 0.3%.
Have a nice week!
Sincerely,
Robert G. Carpenter