Markets
For the week of Monday, June 23, 2014 through Friday, June 27, 2014:
- Standard & Poor’s 500 Index: -0.06%
- Dow Jones Industrial Average: -0.56%
- NASDAQ Composite: 0.70%
Stocks stalled in their push for fresh record highs Monday, as investors paused to assess the market’s recent gains. Investors’ attention shifted to corporate deal news. Monday marked the 46th straight session in which the S&P 500 closed with a move of less than 1%. Overall trading activity was subdued, extending a lull that has lingered since spring. The following day, the markets fell with the Dow suffering its biggest one-day fall in more than a month. On Wednesday, the Dow Jones Industrial Average advanced for the first time in three sessions, adding 0.3%, near the session’s highs. Both the S&P 500 and the NASDAQ increased, but market watchers said it was difficult to pin down a specific reason for the gains. Most agreed the gross domestic product number, which was worse than expected, had already been factored into stock prices through the two previous estimates.
Stocks opened lower on Thursday as traders were unimpressed by the latest positive sign on the job market. Many stocks took a breather amid interest rate speculation. St. Louis Fed President James Bullard said he expects inflation to rise to 2% by the end of the year as unemployment drops below 6%–two factors which may encourage the Fed to adjust rates. The markets closed in the green on Friday as, consumer confidence increased in June. The University of Michigan’s index of consumer sentiment ticked up to 82.5 from 81.9 in May, slightly exceeding an expected reading of 82.
Economic Data
Existing Home Sales:
- Exceeding expectations, existing-home sales improved markedly in May, increasing 4.9% month to month to 4.89 million annualized units.
- This was the highest monthly gain since August 2011 (5.5%).
- Revisions also inched April’s level upward to 4.66 million units.
- The increase is promising as sales show signs of accelerating.
- More momentum is needed, as levels are 5% lower from May 2013.
- The market for existing homes is tightening:
- Months of supply inched down to 5.6 from 5.7, and
- The number of homes for sale is up 6% from this time last year.
Chain Store Sales Snapshot:
- The ICSC Chain Store Sales Index rose 2% on a weekly basis.
- Sales increased 4.1% year-over-year.
Case-Shiller Home Price Index:
- Existing-home price appreciation decelerated on a year-ago basis in the three months ending in April relative to the same period in March.
- The 10-city composite index is up 10.8% year-over-year.
- The 20-city composite is up 10.8% over last year as well.
- Non-seasonally adjusted month-to-month:
- The 10-city composite index increased 1%.
- The 20-city composite index rose 1.1%.
- Seasonally adjusted month-to-month:
- The 10-city composite index was flat
- The 20-city composite index rose 0.2%.
Conference Board Consumer Confidence:
- The consumer confidence index increased 3 points to 85.2.
- May was revised down to 82.2 from the previously reported 83.
New Home Sales:
- Sales of new single-family homes came in at 504,000 annualized units in May.
- The increase is 18.6% higher than April and is the strongest pace since mid-2008.
- However, the available months of inventory declined to 4.5.
- Sales are 16.9% higher than the same period last year.
- The median house price also increased 6.9% year-over-year.
MBA Mortgage Applications Survey:
- The MBA mortgage application composite index fell 1% during the week ending June 20.
- Purchase activity decreased 1.2%.
- Refinance applications fell 0.9%.
Durable Goods Orders:
- New orders for durable manufactured goods fell 1%.
- The estimate was for a 0.2% increase.
- Excluding transportation, new orders fell 0.1%.
- Total shipments increased 0.3%.
- Inventories rose 1%.
Gross Domestic Product:
- First quarter GDP fell 2.9% in the third estimate.
- This is well below the two preliminary estimates of 0.1% growth and a 1% decline.
- The decrease was the largest decline since the first quarter of 2009 and offsets the fourth quarter growth of 2.6%.
Jobless Claims:
- Initial claims for unemployment decreased 2,000 to 312,000.
- The four week moving average was 314,250, an increase of 2,000.
- Continuing claims rose 12,000 to 2.57 million.
Personal Income:
- Personal income increased 0.4%, a 3.5 nominal or 1.9% increase year-over-year.
- Wage income gains rose from 0.3% to 0.4%.
- Nominal consumer spending increased 0.2%.
- Overall prices increased 0.2%, marking the third straight monthly increase.
- Real spending slid 0.1%.
- The saving rate increased to its highest rate since August at 4.8%.
Earnings:
Walgreen Co. (NYSE: WAG)
- Walgreen’s earned $722 million, or $0.75 a share, compared to $624 million, or $0.65 a share, a year ago.
- Excluding one-time items Walgreen’s earned $0.91 a share.
- Analysts expected $0.93 a share.
- Walgreen’s revenue rose 6% to $19.4 billion but fell short of estimates of $19.44 billion.
Bed Bath & Beyond Inc. (NASDAQ: BBBY)
- Bed Bath & Beyond earned $187.1 million, or $0.93 a share, compared to $202.5 million, or $0.93 a share, last year.
- The retailer reported sales of $2.66 billion, a 1.7% increase year-over-year.
- Analysts expected $0.94 a share on sales of $2.69 billion.
- Same-store sales increased 0.4% in the quarter.
General Mills, Inc. (NYSE: GIS)
- General Mill’s earned $404.6 million, or $0.65 a share.
- Excluding one-time items, earnings were $0.67 a share.
- Total sales slid 3% to $4.28 billion.
- Analysts expected $0.72 a share on sales of $4.42 billion.
Monsanto Company (NYSE: MON)
- Monsanto earned $858 million, or $1.62 a share, compared to $909 million, or $1.68 a share, one year ago.
- Monsanto reported sales of $4.25 billion, about flat from a year ago.
- Analysts expected $1.54 a share on sales of $4.39 billion.
Interest Rates
- The two-year Treasury rate rose two basis points to 0.48%.
- The five-year Treasury rate slipped two basis points to 1.67%.
- The 10-year Treasury rate fell seven basis points to 2.54%.
- The 30-year Treasury yield slid eight basis points to 3.36%.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
