June 9, 2023

Weekly Market Commentary June 5th to June 9th 2023

Following a short, but data filled, week last week, we are left with few impactful data releases this week. Combine this with no monetary policy commentary from Fed officials, due to the quiet period before the FOMC rate decision next week on June 14th, and economic news for the week has been relatively light.

One of the main economic releases for the week was the Institute for Supply Management (ISM) Services Survey, which came in at 50.3, lower than the 52.4 expected. A reading greater than 50 signifies growth which has been the case 35 of the 36 past months, with the last contraction reading in December of 2022 at 49.2. With ISM Manufacturing, released last week, being at or below 50 since October of 2022, the lower ISM Services number may indicate the consumer is slowing down and the economy is cooling.

Factory Orders for April came in at 0.4%. This was below the expectation of 0.8% and below the prior month’s figure of 0.6%, which was revised down from 0.9%. The data has been in a wide and wild range over the past couple of years which doesn’t allow us to draw much insight from the numbers at this time.

Durable Goods Orders, goods with a lifespan of 3 years or more, were reported at 1.1% for the month of April, in line with expectations.

The last major data release was the Weekly Initial Jobless Claims figure, which is a measurement of the number of individuals that have filed a claim for unemployment insurance. The number came in with 261k new claims, the highest reading since October of 2021, when only 235k were expected. The prior number reported was also revised up slightly to 233k. This was a bit of a surprise after last week’s unexpected and massive job creation numbers.

The stock markets were up slightly for the week. The S&P 500 was up 0.4% finishing the week at 4,299, while the Nasdaq increased 0.1% to 13,259 and the Dow Jones Industrials rose 0.3% to 33,877. The 10-year Treasury yield increased to 3.74% this week from 3.70% at the end of last week.

Next week’s releases include a Fed rate decision, Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Sales, among others.

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