Dow and the S&P 500 climbed into record territory this week, buoyed by strong economic data and a batch of better-than-expected earnings from a handful of blue chips.
Market activity was also spurred by Federal Reserve Chairman Ben Bernanke's reassurance that there was no concrete timetable for the Fed to scale back its bond purchase program.
Following is an economic review for the week July 14 - July 19, 2013.
Sunday, July 14
Q2 2013 China GDP:
China's GDP grew at 7.5% in Q2 2013, in line with expectations.
Monday, July 15
US Core Retail Sales (m/m):
US retail sales rose 0.4% in June, boosted by solid increase in auto sales. Sales rose in June largely because of a 1.8% increase in auto purchases, the biggest since November 2012.
Tuesday, July 16
Great Britain Consumer Price Index (CPI):
UK annual inflation rate increased by 2.9% in June, up from 2.7% in May.
Canada Manufacturing Sales (May 2013):
Manufacturing sales increased 0.7% to $48.6 billion in May — the second gain in five months. Sales rose in six provinces in May, with the largest gains in Ontario, Alberta and Saskatchewan.
US CPI (m/m):
US CPI increased 0.5% in June. The June reading was close to the consensus forecast of a 0.4% increase for CPI, and a 0.2% increase in core CPI.On a year-over-year basis, CPI is up 1.8%, and core CPI is up 1.6%. However, both the readings are below the Fed's target.
Wednesday, July 17
US Housing Starts:
Construction of new homes fell sharply in June, highlighting risks to the sector's recovery from rising mortgage rates and supply constraints. Housing starts declined 9.9% in June from May to a seasonally adjusted annual rate of 836K units. A 26% drop primarily drove the decline in housing starts in multifamily housing, a category that has traditionally been volatile and has lately shown signs of overbuilding. Starts for single-family homes, which account for the largest share of activity, fell by 0.8%.
US Building Permits:
US building permits for future home construction unexpectedly fell in June to a 911K-unit pace vs. expectations of a rise to a 1 million unit pace.
Crude Oil Inventories:
US commercial crude oil inventories dived 6.90 million barrels to 367 million barrels last week, but remained in the upper half of the average range for this time of year.
The mood in markets turned positive after remarks from Bernanke raised the prospect that the central bank's monetary stimulus may stay in place a little longer than expected. In prepared remarks to lawmakers in Congress, Bernanke said the Fed's timetable for reducing its bond purchases is not on a "preset course" and could actually increase if economic data disappoints. Specifically, he said the Fed wants to see substantial progress in the job market before scaling back the bond purchases.
Bank of Canada Monetary Policy Report:
Bank of Canada projected economic growth to remain choppy in the near terms, owing to unusual temporary factors, although the overall outlook remained little changed from the Bank’s projection in its April Monetary Policy Report. Annual GDP growth was projected to average 1.8% in 2013 and 2.7% in both 2014 and 2015, supported by very accommodative financial conditions.
Thursday, July 18
US Unemployment Claims:
US jobless claims dropped more than expected last week to its lowest level in four months — 334K vs. 345K.
Federal Reserve Chairman Ben Bernanke delivered written remarks to the US Senate Banking Committee were virtually identical to prepared remarks he gave the day before to the House Financial Services Committee.
Philly Fed Manufacturing Index:
Philadelphia-area manufacturers reported their most upbeat conditions in more than two years in July; in a reading that showed US firms were expanding in Q2 despite headwinds from overseas and rising interest rates at home. The Philadelphia Fed's manufacturing survey in July surged to 19.8 from 12.5 in June, marking the highest level since March 2011.
Friday, July 19
Canada Core CPI (m/m):
Canadian core CPI fell to a seasonally adjusted -0.2% in June vs. expectations of -0.3%.
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