For the week of Monday, June 16, 2014 through Friday, June 20, 2014:
- Standard & Poor’s 500 Index: 1.40%
- Dow Jones Industrial Average: 1.03%
- NASDAQ Composite: 1.33%
Stocks barely moved Monday, as investors weighed the turmoil in Iraq against positive manufacturing data and a burst of corporate deal-making. The markets continued with light trading Tuesday, highlighted by strength in small-company and financial stocks. By mid-week, the S&P 500 climbed to a new record high while the stock market’s fear gauge fell to its lowest level in seven years, as investors took comfort from the Fed’s upbeat economic outlook and commitment to low rates. The Federal Reserve reiterated interest rates would stay relatively low for a long time. Indices ended mixed on Thursday. Continuing Iraq concern may have dampened investors’ spirits somewhat. On Friday, the Dow Jones Industrial Average and S&P 500 closed at new all-time record levels.
- Industrial production increased 0.6% in May.
- Factory output increased for the month.
- Motor vehicle and parts production increased 1.5%.
- Excluding motor vehicle and parts production, other manufacturing output rose 0.5%.
- Industrial capacity utilization rose 0.2 percentage points to 79.1%.
Chain Store Sales Snapshot:
- The ICSC Chain Store Sales Index rose 0.4% for the week, compared to last week’s 2.8% decline.
- Year-over-year sales have increased 3.1%.
- Residential construction has yet to break free of its tepid performance.
- Housing starts pulled back in May to a seasonally adjusted annualized rate of 1.00 million units:
- This was in line with expectations, and a 6.5% decline from April’s estimate.
- Disappointingly, single-family starts dropped by 5.9%.
- Permit issuance also dropped month to month, with a decline of 6.4%.
- But single-family permit issuance advanced.
- Completions also pushed upward with a gain of 6.8% compared with April.
- Housing starts and completions are up year over year, but permit issuance is slightly below the May 2013 estimate.
MBA Mortgage Applications:
- The MBA mortgage applications composite index slid 9.2%.
- Purchase activity decreased 4.7%.
- Refinance applications fell 12.7%.
The Federal Open Market Committee Meeting:
- The Federal Reserve continued reducing the monthly pace of asset purchases.
- The $10 billion reduction brings it to $35 billion.
- The new economic projections for this year indicate lower unemployment and less GDP growth.
- The Fed changed interest rate projections, dropping the long-run estimate from around 4% to 3.75%.
- Initial unemployment insurance benefit claims fell to 312,000.
- The four-week moving average fell 3,750 to 311,750.
- Continuing claims fell 54,000 to 2.56 million.
FedEx Corporation (NYSE: FDX)
- FedEx earned $730 million, compared to $303 million a year ago.
- On a per share basis, FedEx earned $2.46 a share, beating analyst estimates of $2.36 a share.
- Revenue increased 3.5% to $11.84 billion, beating analysts’ estimates of $11.66 billion.
The Kroger Co. (NYSE: KR)
- Kroger earned $501 million, or $0.98 a share, compared to $481 million, or $0.92 a share, last year.
- Excluding non-recurring charges, Kroger earned $1.09 a share, beating analysts’ expectations by $0.04.
- Revenue increased 10% to $32.96 billion.
- The two-year Treasury rate was flat at 0.45%.
- The five-year Treasury rate dropped two basis points to 1.67%.
- The 10-year Treasury rate fell two basis points to 2.58%.
- The 30-year Treasury yield slid one basis point to 3.41%.