INCOME AND SPENDING RISE, ALONG WITH CORE INFLATION
According to the latest monthly Department of Commerce snapshot, personal incomes improved 0.4% in May. Personal spending, however, advanced just 0.2% (half the gain forecast by economists polled by Reuters) and was actually flat when adjusted for inflation. May also brought the sixth straight 0.2% monthly increase for the core PCE price index, which the Federal Reserve uses as its inflation yardstick. The core PCE was up 2.0% year-over-year through May, reaching the central bank’s annualized inflation target for the first time in more than six years.1
CONSUMER CONFIDENCE GAUGES SHOW JUNE DECLINES
The University of Michigan consumer sentiment index and the Conference Board consumer confidence index both came in lower for June. The UMich index dipped 1.1 points from its previous reading to a final June mark of 98.2; meanwhile, the CB’s gauge dipped 2.4 points to a still-impressive 126.4.2
NEW HOME SALES JUMP 6.7%
In part, this May gain can be credited to a 17.9% surge in the South, which left new home buying in that region at its best annual pace in 11 years. The Census Bureau also noted that the median new home sale price fell 3.3% across the 12 months ending in May.3
A LOSING WEEK, BUT A WINNING QUARTER
All three of the major Wall Street indices retreated last week. The S&P 500 lost 1.33%; the Nasdaq Composite, 2.37%; the Dow Jones Industrial Average, 1.26%. Friday’s settlements: S&P, 2,718.37; Nasdaq, 7,510.30; Dow, 24,271.41. This data aside, all three benchmarks were in the green in the second quarter – the S&P advanced 2.93%; the Nasdaq, an impressive 6.33%; the Dow, 0.70%.4,5
- Monday, the Institute for Supply Management releases its June manufacturing PMI.
- Nothing major is scheduled for Tuesday.
- Wednesday is July 4th; U.S. financial markets are closed for the holiday.
- Minutes from the Federal Reserve’s June policy meeting appear Thursday, in addition to the latest initial claims numbers, the June Challenger job-cut report, the June ADP payrolls report, and a new ISM service sector PMI.
- The Department of Labor presents its June employment report Friday.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||6/29 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.74||0.55||0.53||1.48|
Sources: wsj.com, bigcharts.com, treasury.gov – 6/29/184,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
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1 – reuters.com/article/usa-economy/wrapup-1-u-s-core-pce-price-index-hits-2-0-percent-spending-slows-idUSL1N1TU1BT
2 – marketwatch.com/economy-politics/calendars/economic
3 – bloomberg.com/news/articles/2018-06-25/u-s-new-home-sales-climb-to-six-month-high-on-surge-in-south
4 – markets.wsj.com/us
5 – quotes.wsj.com/index/SPX
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F29%2F17&x=0&y=0
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F29%2F17&x=0&y=0
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F29%2F17&x=0&y=0
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F28%2F13&x=0&y=0
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F28%2F13&x=0&y=0
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F28%2F13&x=0&y=0
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F30%2F08&x=0&y=0
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F30%2F08&x=0&y=0
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F30%2F08&x=0&y=0
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll