Week of July 8 - 12, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

July 17, 2019

Weekly Economic Review

Weekly Macro Updates

JOLTS Job Openings (May) 7470 est., 7323 actual, 7372 prior: R-
Initial Jobless Claims (Jul 6) 221k est., 209k actual, 222k prior: R+
Continuing Claims (Jun 29) 1683k est., 1723k actual, 1696k prior: R+
Real Avg Hourly Earnings YoY (Jun) 1.5% actual, 1.3% prior
Real Avg Weekly Earnings YoY (Jun) 1.2% actual, 1.0% prior
Bloomberg Consumer Comfort (Jul 7) 63.8 actual, 62.6 prior
MBA Mortgage Applications (Jul 5) -2.4% actual, -0.1% prior
CPI YoY (Jun) 1.6% est., 1.6% actual, 1.8% prior
CPI ex Food and Energy YoY (Jun) 2.0% est., 2.1% actual, 2.0% prior
PPI Final Demand YoY (Jun) 1.6% est., 1.7% actual, 1.8% prior
PPI ex Food and Energy YoY (Jun) 2.1% est., 2.3% actual, 2.3% prior
Empire Manufacturing (Jul) 2.0 est., 4.3 actual, -8.6 prior
NFIB Small Business Optimism (Jun) 103.1 est., 103.3 actual, 105.0 prior

 Strong or Improving
 Inconclusive or lacking trend
 Weak or declining
R+ Revised up
R- Revised down

Directional change based on general
long-term tends.

Capital Market Implications

After a period of softening, last week’s price indices relases (CPI and PPI) reflected firmer but stabilizing inflation.  While some pickup in prices was expected, the substitution of Chinese goods with products from other Asian countries kept inflation in check as tariffs begin to take effect.  Hourly and weekly earnings releases also showed slowly increasing  inflation.  New mortgage applications reflect a continued softening trend although heightened consumer comfort and continued strong employment shows that a strong consumer remains an important part of the US economic picture.

Stocks saw mixed performance last week as domestic markets were generally positive while international stocks were down.  The S&P 500 Index was up 0.8% while the Dow saw a strong gain of 1.5%, driven by performance in large cap stocks.  Small cap stocks were down for the week, -0.3%.  Growth continued to outpace value with the Russell 1000 Growth Index up 1.2% while the Russell 1000 Value Index returned 0.5%.  Internationally, developed markets were down -0.5% and emerging markets lost -0.8%.  Bonds were mostly negative, with the US aggregate falling -0.2%. Corporate bonds were down -0.4% while high yield markets were flat, losing -0.1%.  Municipal bonds outperformed the broader market, gaining 0.3%.