June 27th – Weekly Update

  • Stocks plunged in Asia, Europe and the United States, posting losses for the week after Britain voted to leave the European Union. Investors drove the pound to its lowest levels in decades. Investors seeking safe havens bid up gold and U.S. government bonds. The yield on the ten-year U.S. Treasury fell as low as 1.4% but climbed back to slightly below 1.6% by end of Friday. Oil prices fell for the week.
  • The U. of Michigan consumer sentiment index fell to 93.5 in June from May’s 94.7, a sign that consumers were increasingly worried the economy will slow in the coming year.
  • The U.S. leading economic index edged down 0.2% percent in May after climbing 0.6% in April. The unexpected decline was the result of a sharp increase in initial jobless claims.
  • U.S. house prices rose 0.2% in April, according to the Federal Housing Finance Agency’s monthly index. The previously reported 0.7% increase in March was revised to 0.8%.
  • U.S. existing homes sales rose climbed 1.8% in May to their highest level in more than nine years. The national median price rose 4.7% YoY to $239,700, a new high. Rising demand was attributed to steady job creation and low interest rates. Home prices are rising faster than wages across much of the U.S., potentially damping sales.
  • Confounding expectations for improvement, the Chicago Fed’s index of national economic activity index slipped into contraction, falling from 0.05 in April fell to -0.51 in May. All four sub-categories of indicators — employment-related, housing, personal consumption and production-related — were negative.
  • The International Monetary Fund cut its forecast of U.S. GDP growth to 2.2% for 2016, citing the weak energy sector, strong dollar and overseas turmoil.
  • Euro zone consumer confidence fell slightly in June, decreasing to -7.3 from -7.0 in May, after having risen for two consecutive months. The figure remains above the euro zone’s long-term average.
  • Euro zone construction output rose 0.2% for the month of April, but fell 0.4% year-over-year. The annual drop, the first since September 2015, was driven by a fall in building construction.

CPWM Weekly Market Monitor (2016.06.27)