July 9, 2021

Weekly Market Commentary July 6th to July 9th 2021

The ISM Services Index fell to 60.1 in June from May’s historic reading of 64. Readings above 60 are remarkable by historic measure so while it appears that demand and activity may be decelerating, they are still extraordinarily strong.

Mortgage Applications have now declined two weeks in a row with a reading of -1.8% for the week of July 2 following a -5% decline the previous week. Under the hood, there was weakness in purchases and refinances alike signaling the red-hot housing market is beginning to cool.

The gap between job openings and the unemployed continued to narrow with May’s JOLTs reading. Job Openings totaled 9.209 million whereas the number of unemployed actively looking for work in May totaled 9.316 million, a difference of 107,000 and a significant drop from April’s gap of 619,000. Jobless Claims rose unexpectedly for the week for July 3 to 373,000 however, the 4-week average remained virtually unchanged at 394,500 – the lowest level since March 2020.

Consumer comfort slipped to 53.3, down from last week’s reading of 55.1. This was the second week in a row this measurement has decreased likely due to rising prices at the pumps. Gasoline prices average $3.12 a gallon nationwide, their highest level since 2014.

Equities finished in the black on the week at new all-time highs, with the S&P 500 up 0.4% to 4,370, the Dow Jones increased by 0.2% to 34,870, and the Nasdaq increased by 0.4% to 14,702.

The 10-Year U.S. Treasury continued its downward spiral closing the week at 1.36%. Investor concern about economic growth and the highly contagious Delta variant are driving yields lower.

Next week’s notable economic data releases include Consumer and Producer Prices and Retail Sales.