Week of June 24 - 28, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

July 3, 2019

Weekly Economic Review

Weekly Macro Updates

GDP Annualized QoQ (1Q T) 3.2% est., 3.1% actual, 3.1% prior
PCE Deflator YoY (May) 1.5% est., 1.5% actual, 1.6% prior: R+
U. of Michigan 1 Yr. Inflation (Jun F) 2.7% actual, 2.6% prior
Initial Jobless Claims (Jun 22) 220k est., 227k actual, 217k prior: R+
Continuing Claims (Jun 15) 1665k est., 1688k actual, 1666k prior: R+
Conf. Board Consumer Confidence (Jun) 131.0 est., 121.5 actual, 131.3 prior: R-
Personal Consumption (1Q &T) 1.3% est., 0.9% actual, 1.3% prior
U. of Michigan Sentiment (Jun F) 97.9 est., 98.2 actual, 97.9 prior
U. of Michigan Expectations (Jun F) 89.3 actual, 88.6 prior
Personal Income (May) 0.3% est., 0.5% actual, 0.5% prior
Personal Spending (May) 0.5% est., 0.4% actual, 0.6% prior: R+
New Home Sales MoM (May) 1.6% est., -7.8% actual, -3.7% prior: R-
Durable Goods Orders (May P) -0.3% est., -1.3% actual, -2.8% prior: R-

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

Capital Market Implications

Last week’s economic releases reflected the effects of slowing global growth and softening manufacturing. Consumer releases, in particular, were mixed as confidence remained high and income and spending continued in a positive trend, but other releases highlighted concerns over trade and a worsening economic picture. Unemployment claims were greater than expected, with the four week average now in a rising trend. Durable goods orders fell more than anticipated in May, driven by softness in aircraft and defense orders.   

Large cap stocks finished down for the first time in three weeks with the S&P 500 Index falling -0.3% and the Dow Jones Index down -0.5%. Smaller cap stocks fared better, with the Russell 2000 gaining 1.2%. International markets also saw positive returns for the last week of the quarter, as developed markets were up 0.7% and emerging markets rose 0.4%. Bond markets were generally positive for the week, with the US Aggregate Index returning 0.4%. Corporate bonds rose 0.7% while municipal markets were flat, gaining only 0.1%. High yield bonds traded in line with stocks, down slightly for the week. In spite of volatility in the first half of the year, both stock and bond markets have positive performance through the end of June.