Rover's Weekly Market Brief — 7/27/2018

Indices

DJIA: 25,451.10 (+1.57%)

NASDAQ: 7,737.42 (-1.05%)

S&P 500: 2,819.22 (+0.62%)

Commodities

Gold: 1,232.40 (+0.11%)

Copper: 281.80 (+4.54%)

Crude Oil: 68.96 (-1.92%)

Economy

New orders for durable goods were up +1.0% in June after declines of -0.3% and -1.0% in the two previous months. The upturn was led by a +1.5% gain in transportation orders, with increases for motor vehicles (+4.4%, +5.1% Y/Y), civilian aircraft (+4.3%, +15.2% Y/Y), and defense aircraft (+20.2%, -1.7% Y/Y), and new orders excluding transportation were up +0.4% (+8.1% Y/Y). Defense capital goods orders were down -11.6% after increasing the previous two months, and removing defense spending brought overall new orders up by +1.5% (+7.7% Y/Y). Orders were up for both capital goods (+0.2%, +10.1% Y/Y) and machinery (+0.2%, +6.6% Y/Y), but fell for computers (-4.1%, -15.2% Y/Y) and primary metals (-0.4%, +16.1% Y/Y).

The Census Bureau’s Advance Economic Indicators report for June showed a -$37.776 billion (-1.5%) drop in exports and a +$1.342 billion (+0.6%) increase in imports, resulting in a $3.565 billion (+5.5%) increase in the goods trade deficit to $68.3 billion. Exports dropped for “other” goods (-10.0%), which includes defense products, consumer goods (-8.5%), automobiles (-6.1%), and capital goods (-1.8%), but rose for industrial supplies (+3.8%), which includes petroleum products. Imports dropped for capital goods (-2.7%) and food (-1.7%), and rose for consumer goods (+3.6%), “other” goods (+1.7%), automobiles (+1.6%), and industrial supplies (+1.5%). Seasonally adjusted inventories for both wholesale and retail goods were virtually unchanged in June compared to May.

The first estimate for 2018 Q2 GDP was +4.1%, with contributions from higher rates for personal spending, exports, and government spending, and a slowing of the decrease in residential fixed investment. These contributions were offset by drops in private inventory investment, a deceleration in nonresidential fixed investment, and an increase in import growth. Personal income was up $183.7 billion in Q2 vs a $215.8 billion increase in Q1, with inflation and tax adjusted disposable personal income up +2.6% in Q2 vs +4.4% for Q1, and the savings rate at +6.8% for Q2 vs +7.2% for Q1. This month’s report included a comprehensive update for GDP figures from 1929 through Q1 2018, which included upward revisions of average GDP from +1.4% to +1.5% from 2007-2017, and from -2.8% to -2.7% from Q4 2007 through Q2 2009.

Upcoming Economic Reports:

Tuesday July 31 – Personal Income and Outlays

Wednesday August 1 – Federal Open Market Committee (FOMC) Meeting Announcement

Earnings Calendar:

 

Monday Tuesday Wednesday Thursday Friday
HSBC
Holdings
(HSBC)
Apple
(AAPL)
Enterprise
Prods Partners
(EPD)
DowDuPont
(DWDP)
Berkshire
Hathaway
(BRK.B)
Caterpillar
(CAT)
Pfizer
(PFE)
ING Groep
(ING)
Siemens
(SIEGY)
Toyota
Motor
(TM)




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