Chief Economist Scott Brown discusses the latest market data.

The economic calendar was thin. Investors remained concerned about rising cases of COVID-19. A return to a full lockdown appears unlikely, but the pace of improvement in the economy is expected to slow.

The ISM Non-Manufacturing Index rose to 57.1 in June, vs. 41.8 in April and 45.4 in May (a figure above 50 indicates expansion). The report showed business activity and new orders rebounding sharply, but employment continued to decline (less than in the two previous months). Jobless claims fell to 1.314 million, a larger-than-expected decline. However, claims figures are often quirky around major holidays and the level remains elevated. The Producer Price Index (PPI) fell 0.2% in June, largely reflecting a drop in food prices (following a surge in May). Ex-food, energy and trade services, the PPI rose 0.3% (-0.1% y/y).

Next week, the mid-month economic data reports are expected to reflect further improvement in the economy, but investors are likely to keep a close eye on the escalation in COVID-19 cases. Treasury will report another whopping budget deficit. Higher gasoline prices should add to the headline Consumer Price Index figure in June, but core inflation is expected to remain mild. Industrial production should pick up, reflecting a broad-based rebound in factory activity. Jobless claims will remain subject to seasonal distortions (the Independence Day holiday, the end of the school year), but the trend should remain lower (although still uncomfortably high). Retail sales are expected to have risen further, partly reflecting pent-up demand from the lockdown period. Residential construction figures are likely to be mixed (watch single-family permits).

Indices

  Last Last Week YTD return %
DJIA 25706.09 25734.97 -9.92%
NASDAQ 10547.75 10154.63 17.56%
S&P 500 3152.05 3115.86 -2.44%
MSCI EAFE 1805.62 1783.59 -11.36%
Russell 2000 1398.92 1427.31 -16.16%

Consumer Money Rates

  Last 1 year ago
Prime Rate 3.25 5.50
Fed Funds 0.00 2.38
30-year mortgage 2.91 3.88

Currencies

  Last 1 year ago
Dollars per British Pound 1.2606 1.250
Dollars per Euro 1.1285 1.125
Japanese Yen per Dollar 107.20 108.46
Canadian Dollars per Dollar 1.359 1.308
Mexican Peso per Dollar 22.621 19.139

Commodities

  Last 1 year ago
Crude Oil 39.62 60.43
Gold 1803.80 1412.50

Bond Rates

  Last 1 month ago
2-year treasury 0.14 0.20
10-year treasury 0.57 0.74
10-year municipal (TEY) 1.28 1.30