Report Releases: July 10–14, 2023
Consumer Credit, May (Monday)
Consumer credit for May rose $7.24B versus expectations of $20.23B, following $23.01B in April. This was the smallest increase since November of 2020. Revolving credit, which includes credit cards, increased 8.2 percent versus 13.8 percent in April. This data point may indicate a slowing consumer.
Consumer Price Index, June (Wednesday)
Consumer inflation slowed on a year-over-year basis in June, with the annual 3 percent increase coming in below economic estimates and marking the lowest level of consumer inflation in more than two years.
- Prior monthly CPI/core CPI growth: +0.1%/+0.4%
- Expected monthly CPI/core CPI growth: +0.3%/+0.3%
- Actual monthly CPI/core CPI growth: +0.2%/+0.2%
- Prior year-over-year CPI/core CPI growth: +4.0%/+5.3%
- Expected year-over-year CPI/core CPI growth: +3.1%/+5.0%
- Actual year-over-year CPI/core CPI growth: +3.0%/+4.8%
Producer Price Index, June (Thursday)
Producer inflation also showed slowing year-over-year growth in June. Headline producer price growth fell to 0.1 percent during the month while core price growth also slowed.
- Prior monthly PPI/core PPI growth: -0.4%/+0.1%
- Expected monthly PPI/core PPI growth: +0.2%/+0.2%
- Actual monthly PPI/core PPI growth: +0.1%/+0.1%
- Prior year-over-year PPI/core PPI growth: +0.9%/+2.6%
- Expected year-over-year PPI/core PPI growth: +0.4%/+2.6%
- Actual year-over-year PPI/core PPI growth: +0.1%/+2.4%
University of Michigan Consumer Sentiment Survey, July (Friday)
Consumer sentiment improved more than expected in July, with the index rising to its highest level since September 2021. Both the current conditions and future expectations improved more than expected during the month.
- Consumer credit was abnormally low, but, according to the University of Michigan consumer sentiment survey, consumers continue to remain upbeat
- Consumer price inflation hit its lowest level in more than two years. Producer price inflation also continues to decline, increasing just 0.1 percent year-over-year in June
|MSCI Emerging Markets||4.95%||4.28%||9.38%||10.00%|
Equity markets rallied on the back of reports of falling inflation and strong bank earnings. The June Consumer Price Index (CPI) figure came in at three percent, which is the lowest level in more than two years. Additionally, banks such as J.P. Morgan (JPM), Wells Fargo (WFC), and Citigroup (C) all beat earnings as higher rates and continued loan growth led to higher net interest income. International markets benefited from softening in the dollar, and developed and emerging market indices were both up more than four percent as a result.
|Fixed Income Index||Month-to-Date||Year-to-Date||12-Month|
|U.S. Broad Market||0.20%||2.29%||-1.35%|
The yield curve saw significant drops beyond the 1-year U.S. Treasury as a continued decline in inflation supported short- to intermediate- term bonds. Should inflation continue to fall, the bite from inflation on fixed coupon payments is reduced. The 2-year and 5-year Treasury yields fell 20 and 33 basis points (bps), respectively.
- Falling inflation and better-than-expected bank earnings supported an equity rally
- Rates dropped beyond the one-year timeframe as inflation continued its decline
Following last week’s consumer credit and confidence reports, investors will turn their attention to June retail sales.
- The week will kick off on Tuesday with the release of retail sales and industrial production data for June. Retail sales growth is expected to accelerate in June, which would mark consecutive months with spending growth. Industrial production is set to remain unchanged in June after falling modestly in May, and manufacturing production is expected to grow.
- The National Association of Home Builders Housing Market Index is also slated for release on Tuesday. Home builder confidence is expected to improve in July, with the index set to hit a one-year high during the month.
- The week will wrap with the release of existing home sales for June on Thursday. Existing home sales are expected to fall in June, which would mark four consecutive months of declining sales.
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Authored by the Investment Research team at Commonwealth Financial Network.
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