Markets “In a Nutshell” for June 14, 2021
Investment Week at a Glance
Stocks were mixed for the week. The Dow Jones Industrial Average fell 0.80%, the S&P 500 was up 0.40%, and the NASDAQ rose 1.80%. Foreign stocks (MSCI EAFE) were up as well, rising 0.30%. Bond prices rose for the week, with the 10-year U.S. Treasury ending the week at 1.45%. (Data source: Wall Street Journal)
The much anticipated CPI (Consumer Price Index) numbers for May came out on Thursday and rose more than the forecasts predicted. CPI rose 5% year over year in the month of May, the highest we have seen since 2008. Core CPI, which excludes food and energy, rose 3.8%, the largest 12 month increase we have seen since 1992.
The year over year increase in inflation is expected due to the Pandemic but not only did inflation rise year over year but we also saw a jump from April to May. Core CPI increased by 0.7% in just the past month, more than the 0.5% that was forecast.
Despite the rise in inflation, government bond yields fell to their lowest levels in the past three months. Stocks, as a whole, had little reaction to the CPI news directly which shows the fear of runaway inflation has gone away for most investors in the short term but is something to keep an eye out for in the long term. Many of the price increases currently are in industries that are benefiting from the reopening.
This past week’s initial jobless claims number was the lowest we have seen since the Pandemic started last year. There also is a record number of job openings in the economy with 9.3 million openings currently. With this number so high and unemployment benefits going away as we get back to normal, the market should be able to handle some inflation with the economy set to take off.
Since initial jobless claims started being tracked in 1967, what is the largest number of claims in a single week? (Scroll Down for Answer)
Have a Great Week!
a. 6.149 million is the highest, which was in early April, 2020.