Rover's Weekly Market Brief — 7/14/2017

Economy

The Consumer Price Index (CPI) was flat in June and the yearly CPI dropped to 1.6%, down from May’s 1.9% yearly rate. The yearly CPI has been dropping since February’s high of 2.7%, and June’s reading is the smallest yearly gain since October 2016. Energy prices fell -1.6% in June, while costs for food leveled off after 5 months of increases. Core CPI, which removes the more volatile food and energy components, matched May’s monthly and yearly inflation rates at +0.1% M/M and 1.7% Y/Y.

Retail sales dropped -0.2% in June, after an upwardly revised -0.1% drop for May. The drop in energy prices seen in the CPI report was reflected in a -1.3% drop in gas station sales, with additional drops for grocers (-0.5%), restaurants (-0.6%), department stores (-0.7%), and sporting goods/hobby/book stores (-0.6%). Sales increased for auto dealers (+0.1%) and nonstore (i.e. online) retailers (+9.2%). Total retail sales for June increased +2.8% over the previous 12 months, and were up +3.8% over the previous 3 months.

Industrial production increased for the fifth consecutive month, with June’s +0.4% increase following a +0.1% upward revision for May, and a yearly increase of +2.0%. The recovering oil and gas sector help push mining up +1.6% in June and +9.9% over the past 12 months, but it is still 50% below its June 2014 peak. Manufacturing production has been volatile throughout 2017, with month over month changes swinging from -0.8% in March to +1.0% in April – that trend continued with May’s -0.4% being followed by a +0.2% for June. Capacity utilization was up +0.1% to 75.4% in manufacturing, and up 1.1% to 84.8% for mining, but both sectors remained below their long-run capacity utilization averages.

Upcoming Economic Reports:

Wednesday July 19 – Housing Starts

Thursday July 20 – Philadelphia Fed Business Outlook Survey

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
BlackRock (BLK)	Johnson & Johnson (JNJ)	US Bancorp (USB)	Microsoft (MSFT)	General Electric (GE)
Netflix (NFLX)	Bank of America (BAC)	Morgan Stanley (MS)	Visa (V)	Honeywell International (HON)