Economic Update 07/28/14

YEARLY INFLATION AT 2.1%

In June, the headline Consumer Price Index recorded annualized inflation at that level for a second consecutive month. Back in February, yearly consumer inflation was down at 1.1%. June saw the CPI rise 0.3% and the core CPI (minus food and energy prices) advance 0.1%; core CPI was up 1.9% year-over-year.

CONTRASTING HOME SALES NUMBERS IN JUNE

The Census Bureau announced an 8.1% June drop in new home buying, which left 5.8 months of inventory in the market (the most since October 2011). New home prices were up 5.3% year-over-year. Existing home sales picked up 2.6% in June; that was the second straight monthly gain, pushing the seasonally adjusted annual sales rate above the 5 million mark for the first time since October.

MORE DEMAND FOR DURABLES

Hard goods orders improved 0.7% in June; analysts polled by Bloomberg projected a 0.5% advance. The Commerce Department also announced a 3.5% yearly gain.

MIXED WEEK FOR MAJOR U.S. INDICES

Across five days filled with earnings news and geopolitical concerns, the Dow fell 0.83% to 16,960.57, the Nasdaq gained 0.40% to 4,449.56, and the S&P 500 went flat for the week, retreating just 0.03 points and settling Friday at 1,978.34.

THIS WEEK: Monday, NAR announces June pending home sales and earnings roll in from Berkshire Hathaway, Hertz Global, Tyson Foods, Trulia, Whole Foods, Coach, HealthSouth, XL, Herbalife and Norwegian Cruise Lines. Tuesday brings the May Case-Shiller home price index, July’s Conference Board consumer confidence survey and earnings from Twitter, Aflac, Merck, Aetna, UPS, Big 5, Martin Marietta, McGraw Hill, Spirit Airlines, Panera, Genworth, Ameriprise Financial, American Express, Marriott, Anadarko, Amgen, Ruby Tuesday, Sirius XM, Pfizer and Newmont Mining. Wednesday offers earnings from Allstate, Cardtronics, Garmin, Humana, Hartford, Tesoro, WellPoint, Valero, Yelp!, SodaStream, Akamai, Revlon, Noble Corp., Kraft Foods and MetLife, along with a Fed policy statement, July’s ADP job change report and a first estimate of Q2 GDP from Washington. Thursday, July’s Challenger job cuts report and new initial claims figures arrive plus earnings from ADP, Tesla, T-Mobile, Hyatt, Public Storage, ExxonMobil, Fluor, Edison, PG&E, Marathon Petroleum, Occidental, Avon, Time Warner Cable, Coinstar, Mosaic, MasterCard, Live Nation, Kellogg, Western Union, Cigna, ConocoPhillips, Charter Communications and DirecTV. Friday, we get the July jobs report, the June personal spending report and earnings from Burger King, Hilton, Cummins and Clorox.