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Weekly Updates

Weekly Update – July 12, 2019

  • US stock markets closed out the week setting new record highs on sentiment that while the Federal Reserve is highly unlikely to tighten monetary policy over the short term, it may even lower rates in the coming months, if not sooner. The Dow ended the week at an all-time high of 27332.03, while The S&P 500 closed at 3013.77, also a record. Oil prices surged for the same reason, crossing over the $60 per barrel psychological benchmark, one month after dipping into bear-market levels. Meanwhile, US Treasury yields edged higher on a greater-than-expected increase in CPI, with the 10-year ending the week at 2.122%, the highest close since June 12.
  • Federal Chairman Jerome Powell told Congress that uncertainty around trade tensions and the global economy continue to weigh on the US economic outlook. He noted several issues yet to be resolved, including trade, the debt ceiling and Brexit, and that weak inflation could be even more persistent than Fed expectations. However, he reiterated the Fed’s outlook for growth to remain solid, labor markets to remain strong, and inflation to move back to 2% over time.
  • June FOMC minutes showed that many participants believed the case for looser monetary policy had strengthened and may be necessary near-term if global uncertainties persist. Several noted a nearterm rate cut could help cushion the effects of potential shocks and also expressed concern about continued weakness in inflation and implications for expectations, while others indicated the case is not strong enough yet for a rate cut.
  • June CPI increased 0.1% from May and 1.6% from the year-ago period, while Core CPI increased 0.3% in June. Elsewhere, the producer-price index, a measure of the prices businesses receive for their goods and services, rose a seasonally adjusted 0.1% in June from a month earlier.
  • Initial jobless claims decreased by 13,000, coming in at 209,000 for the week ending July 6. , well below the prior week’s 222,000. Meanwhile, continuing claims rose by 27,000 to 1,723,000 in the week ended June 29, down from 1,745,000 a year earlier.

CPWM Weekly Market Monitor (2019.07.12)


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