Week in Review with Maureen Kelliher
Maureen Kelliher

Each week, Investment Officer and resident economist Maureen Kelliher comments on investment trends and economic news which impact the financial markets.

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Capital Market Implications for the Week of May 21 - 25, 2018

Last week’s economic releases were dominated by home price indices and consumer confidence surveys. Housing prices improved in April, as both the FHFA House Price Index and the S&P CoreLogic CS 20-City Index increased, up 0.1% and 0.5%, respectively. With a shortage of homes for sale, prices have recorded new highs for 17 consecutive months and are now 8.8% above the prior price peak reached in 2007.  However, national averages don’t tell the whole story, as cities in the West continue to experience double-digit annual-price gains while gains are more muted in the Mid-West (e.g., Chicago posted the smallest increase at 2.8% year-over-year). Consumer confidence remained high in May, with survey respondents indicating they felt their present situation was better than at any time in the last 15 years.

 

Last week, domestic stocks were up overall in lackluster trading. The S&P 500 Index advanced 0.3% while the Dow Jones Industrial Average gained 0.2%. There was a reversal of fortune within stock sectors for the week, as interest-rate-sensitive stocks rebounded while energy companies collapsed, down more than -4.0%. Both the Turkish lira and Italian debt (in each case due to political actions) came under selling pressure last week, which sent international stocks, as represented by MSCI EAFE, down -1.5%. Emerging markets were flat. The volatility in European bonds gave Treasuries a boost and bonds closed higher for the week. The Barclays U.S. Aggregate Bond Index gained 0.7% while U.S. corporates rose 0.8%. Ten-year municipal bonds increased 0.4% and high yield bonds ended the week relatively unchanged.

 

Week in Review

Securities and other investment products are:

Wealth Management Disclosure

 

Weekly Macro Updates

  • Initial Jobless Claims (May 19) 220k est., 234k actual, 223k prior
  • Continuing Claims (May 12) 1746k est., 1741k actual, 1712k prior
  • Markit U.S. Manufacturing PMI (May P) 56.5 est., 56.6 actual, 56.5 prior
  • Markit U.S. Services PMI (May P) 55.0 est., 55.7 actual, 54.6 prior
  • New Homes Sales MoM (Apr) -2.1% est., -1.5% actual, 2.0% prior: R+
  • Existing home Sales MoM (Apr) -0.9% est., -2.5% actual 1.1% prior
  • FHFA House Price Index MoM (Mar) 0.6% est., 0.1% actual, 0.8% prior: R+
  • S&P CoreLogic CS 20-City YoY NSA (Mar) 6.45% est., 6.79% actual, 6.76% prior: R-
  • Durable Goods Orders Ex Transport (Apr P) 0.5% est., 0.9% actual, 0.4% prior: R+
  • Capital Goods Orders Nondef Ex Air (Apr P) 0.4% est., 0.8% actual, -0.7% prior: R+
  • University of Michigan Sentiment Index (May F) 98.8 est., 98.0 actual, 98.8 prior 
  • Conf Board Consumer Confidence Index (May) 128.0 est., 128.0 actual, 125.6 prior
  • Conf Board Consumer Present Situation (May) 161.7 actual, 104.3 prior: R-
  • Dallas Fed Reserve Manufact Activity (Apr) 23.8 est., 26.8 actual, 21.8 prior
  • Strong or Improving
  • Inconclusive or lacking trend
  • Weak or declining

R+ Revised up
R- Revised down

 

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