Rover's Weekly Market Brief — 6/29/2018

Indices

DJIA: 24,271.40 (-1.26%)

NASDAQ: 7,510.00 (-2.38%)

S&P 500: 2,718.00 (-1.34%)

Commodities

Gold: 1,253.90 (-1.32%)

Copper: 295.35 (-2.43%)

Crude Oil: 74.30 (+8.34%)

Economy

New orders for durable goods declined for the second month, with orders down $1.4 billion (-0.6%) to $248.8 billion in May after an upwardly revised -1.0% drop in April to $250.2 billion. Transportation orders were down -1.0%, with a -4.2% drop in vehicles and a -7.0% drop in civilian aircraft orders offsetting a +21.1% increase in military aircraft orders. Non-defense capital goods orders were down $1.6 billion (-2.0%), while defense capital goods orders were up $1.7 billion (+15.1%), bringing overall capital goods orders up +0.2%. Excluding the drop in transportation lessened the overall new orders drop to -0.3%, but excluding the increases in defense spending brought orders down to a -1.5% drop.

A downward revision from +1.0% to +0.9% for consumer spending, along with a drop in business inventories from $20.2 billion to $13.9 billion, and an upward revision of the GDP price index from +1.9% to +2.2%, helped drop the final estimate of 2018 Q1 GDP +2.2% to +2.0%. Business spending compared to Q1 2017 was revised upward from +5.5% to +5.8%, with a +7.1% increase in nonresidential fixed investment, and a -0.4% drop in residential fixed investment. On a yearly basis, business fixed investment was up +5.4%, personal consumption expenditure (PCE) spending was up +4.5% for goods, and +2.1% for services, and government spending was up +0.7%, with a -0.9% drop in federal nondefense spending offsetting a +2.3% increase in defense spending. Inventory and capital consumption adjusted after tax corporate profits were up +16.9% compared to Q1 2017, and up +6.0% on a yearly basis.

Personal income was up +0.4% in May, with after tax, inflation adjusted disposable personal income up +0.2%. Consumer spending was revised downward for April from +0.6% to +0.5%, and slowed to a +0.2% gain in May. PCE prices increased +0.2% (+2.3% Y/Y), while core PCE inflation, which strips out food and energy costs, was up +0.2% (+2.0% Y/Y). PCE spending increased for both durable (+0.3%) and nondurable (+0.3%) goods, but a -0.2% drop in service spending kept PCE spending for May flat at 0.0%. On a yearly basis, PCE spending was up +0.9%, reflecting increases in service spending (+1.5%), and nondurable goods spending (+0.5%), and a -2.1% drop in durable goods spending. Personal savings, which measure the difference between disposable personal income and PCE spending, rose from $448 billion to $482 billion, for a +0.2% increase in the personal saving rate to +3.2%.

Upcoming Economic Reports:

Friday July 6 – Employment Situation

Friday July 6 – International Trade

Earnings Calendar:

 

Monday Tuesday Wednesday Thursday Friday
Orix
(IX)
Entertainment
One
(ENTMF)
Babcock
International Gr
(BCKIY)
Melco
Intl Dev
(MDEVF)
Pure
Cycle
(PCYO)
Herman
Miller
(MLHR)
Tata
Motors
(TTM)
RPC Group
(RPCGF)
WageWorks
(WAGE)
Griffin
Industrial Realty
(GRIF)




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