Stocks opened last week mostly lower as traders digested mixed bank earnings and rising inflation data. Although June’s Consumer Price Index met expectations, rising costs for imported goods such as coffee, furniture, and appliances—possibly linked to increased tariffs—sparked some concern. Markets turned positive toward the end of the week on the back of strong corporate earnings and an encouraging retail sales report. Traders also kept a close eye on the White House’s push for higher tariffs on the European Union. Among the S&P sectors, utilities and information technology outperformed, while health care, materials, and energy lagged. Long-term bond yields held steady, crude oil prices dropped, the dollar gained for a second week, and gold declined for the first time in three weeks.
Last Week’s Economic News
- Existing home sales fell some in June and were unchanged from a year earlier. High prices, elevated mortgage rates, and moderate supply continue to weigh on the housing market.
- The median existing-home sale price in June was $435,300, a new high for the month and up from both May and June 2024.
- Sales of new single-family homes rose slightly in June but were below the year-ago level.
Durable goods orders excluding transportation rose 0.2%. - Retail gasoline prices averaged $3.121, $0.350 below last year’s price.
- Initial unemployment claims for the week ended July 19 fell by 4,000 to 217,000. Continuing claims edged higher to 1.955 million.
Eye on the Week Ahead
Two key market-moving events are on the radar: the first estimate of second-quarter GDP and the Federal Reserve’s policy meeting. The economy contracted slightly in Q1. While there is speculation that the Fed could cut interest rates this week, policymakers appear split on the timing of any adjustment.
Have a nice week!
Sincerely,
Robert G. Carpenter