In order of importance to me are: 1) the long term trend, 2) the current chart pattern, and 3)picking a good spot to buy or sell.
Ed Seykota

1. U.S. Home Prices Hit Record in June for Second Consecutive Month — the spring home-buying season, usually the busiest time of year for the housing market, was a dud this year. Home sales declined in June for the fourth straight time on a monthly basis. The combination of high prices and elevated mortgage rates has made homeownership less attractive to renters and deterred current homeowners from moving. But low inventory of homes for sale in much of the country is pushing prices higher. The national median existing-home price in June rose to $426,900, a record in data going back to 1999 and a 4.1% increase from a year earlier, the National Association of Realtors said Tuesday. Prices aren’t adjusted for inflation. Sales of previously owned homes in June fell 5.4% from the prior month to a seasonally adjusted annual rate of 3.89 million, NAR said. On an annual basis, existing-home sales, which make up most of the housing market, also fell 5.4%.
2. US New-Home Sales Unexpectedly Decline to a Seven-Month Low — Contract signings on new single-family homes decreased 0.6% to a 617,000 annual pace, the slowest since November, according to government data released Wednesday. The figure compared with a 640,000 median estimate in a Bloomberg survey of economists. The latest figures follow a topsy-turvy first half of the year, with sales gaining ground throughout the spring before slumping in May by the most in nearly a year. Thirty-year mortgage rates have dipped below 7% in recent weeks, but remain double what they were at the end of 2021, encouraging many builders to offer sales incentives such as buying down customers’ mortgages. Meantime, builders have continued to add supply, with inventory edging up to 476,000 homes in June, still the most since 2008. At the current rate of sales, that inventory would last 9.3 months, the longest since October 2022.
3. US Economy Grew Faster Than Expected Last Quarter on Firm Demand — Real gross domestic product, a measure of all the goods and services produced during the April-through-June period, increased at a 2.8% annualized pace adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for growth of 2.1% following a 1.4% rise in the first quarter. Consumer spending helped propel the growth number higher, as did contributions from private inventory investment and nonresidential fixed investment, according to the first of three estimates the department will provide. Personal consumption expenditures, the main proxy in the Bureau of Economic Analysis report for consumer activity, increased 2.3% for the quarter, up from the 1.5% acceleration in Q1. Both services and goods spending saw solid increases for the quarter.
4. U.S. Inflation Data Keeps Door Open For September Interest Rate Cut — the Department of Commerce said Friday its personal income expenditures inflation gauge rose 2.5% in June compared to a year earlier, slowing for its 2.6% pace in May. Excluding volatile food and energy prices, PCE inflation rose 2.6%, the same as in May. Following the data release, Treasury yields declined in an indication of investors’ increasing expectations that monetary easing is about to start. The 10-year yield was recently at 4.20%. The Federal Reserve targets 2% inflation and the PCE is its preferred gauge. The U.S. central bank is widely expected to keep rates at current high levels next Wednesday, while opening the door wider for a cut in September.

The week ahead — Economic data from Econoday.com:

“Great traders aren’t born or made overnight. It takes patience, discipline and consistency to master the art of trading” — unknown

1. US Retail Sales Excluding Autos Rise by Most in Three Months — Retail purchases less motor vehicles rose 0.4% last month after an upwardly-revised 0.1% advance in May. Total retail sales were unchanged, restrained by a 2% slide in receipts at auto dealers. The figures aren’t adjusted for inflation. Of the 13 categories tracked by the Commerce Department, only three registered declines. Those included sales of gasoline, reflecting lower prices in the month. Sales at sporting goods stores also edged lower. Excluding receipts at filling stations and auto dealers, retail sales jumped 0.8% — the most since the start of 2023. Non-store retailers led the gains, recording their strongest advance in three months. Sales at health and personal care stores rose by the most since October, while sales at building material and garden equipment stores increased by the most since February.
2. Fed’s Beige Book Shows Slight Economic Growth, Cooling Inflation — The US economy grew at a slight pace heading into the third quarter, with a number of regions noting flat or declining activity, the Federal Reserve said in its Beige Book survey of regional business contacts.
Employment also increased only slightly, according to the report Wednesday. Labor turnover declined, and contacts in several districts expect to be more selective about who they hire and not backfill all open positions. Of the districts, five noted flat or declining economic activity — three more than the prior period. Looking ahead, businesses expected the slowing to continue.
3. ECB Holds Rates Steady With More Data Needed for Next Cut — The deposit rate was kept at 3.75% on Thursday — as all 55 economists in a Bloomberg survey predicted. The ECB reiterated that borrowing costs will remain “sufficiently restrictive for as long as necessary” to ensure inflation returns to 2%. The ECB is weighing whether euro-zone inflation is cooling sufficiently to allow further monetary loosening. Last month saw a small dip to 2.5% from 2.6%, and while underlying pressures held firm and the advance in services costs again topped 4%, the ECB on Thursday cited “one-off factors” in explaining the move.

The week ahead — Economic data from Econoday.com:

“You need to know very well when to move away, or give up the loss, and not allow the anxiety to trick you into trying again.” – Warren Buffett1.

1. Powell Inches the Fed Closer to Cutting Rates — Federal Reserve Chair Jerome Powell made a subtle but important shift that moved the central bank closer to lowering interest rates when he suggested Tuesday that a further cooling in the labor market could be undesirable. Powell conceded that he wouldn’t have arrived at such a judgment as recently as two months ago—and indeed, the Fed leader was more measured in comments made at a conference in Portugal last week, before the release of the June employment report by the Labor Department. Behind the shifting outlook is labor-market data showing a slowdown in hiring and a mild but steady increase in the share of Americans looking for work amid an increase in the workforce, due partly to more immigration.
2. Biden Tightens Trade Rules for Steel, Aluminum From Mexico — The U.S. will levy a 25% tariff on Mexican imports containing steel from China and a 10% duty on products made with aluminum from the country, the White House said. Products from Mexico typically enter the U.S. duty free as part of a trade agreement with Canada and Mexico. Steel and aluminum must be melted and poured in the U.S., Mexico or Canada to qualify for duty-free treatment, according to the White House.
U.S. steelmakers and other manufacturers have complained that China is circumventing the existing tariffs on steel and aluminum by routing the metals through Mexico. The U.S. government has said steel and aluminum exported from China are unfairly priced and benefit from unlawful government subsidies.
3. Milder Inflation Opens Door Wider to September Rate Cut — The consumer-price index, a measure of goods and services costs across the economy, fell slightly from May, dropping the year-over-year inflation rate to 3%, which was the lowest since June 2023. Core prices, which exclude volatile food and energy items and are seen as a better gauge of underlying inflation, rose just 0.1% since May. That was the mildest increase since January 2021, when large swaths of the economy were still frozen by the pandemic.
Altogether, the report showed prices cooled broadly in the second quarter and were below economists’ expectations—the reverse of what happened in the first three months of the year, when inflation was surprisingly brisk. The report keeps the door wide open to a September interest-rate cut. Earlier this week, Fed Chair Jerome Powell laid the groundwork to cut by suggesting the labor market is slowing in a way that has diminished a major source of inflation and risks further weakness that wouldn’t be desirable.
4. Wholesale prices rose 0.2% in June, slightly hotter than expected — The producer price index climbed 0.2% last month, the Labor Department’s Bureau of Labor Statistics reported Friday. Economists surveyed by Dow Jones were expecting a 0.1% increase for the index. The PPI is now up 2.6% over the past year.
The PPI is a gauge of prices that producers can get for their goods and services in the open market. In June, a rise in the price for services offset a decline for goods. The hotter-than-expected PPI reading runs counter to recent data that shows inflation declining, though economists and investors tend to put more weight on the consumer-focused inflation readings. The central bank’s next policy meeting is at the end of July, where it is widely expected to hold rates steady. Traders have increasingly dialed in on the September meeting as the likely time for the first rate cut.

The week ahead — Economic data from Econoday.com:

“Happy July 4th On This Shorten Holiday Week — Do More of What Works and Do Less of What Doesn’t”
 
1. Private payrolls grew by just 150,000 in June, less than expected — Private payroll growth edged lower in June, according to a report Wednesday from ADP that indicates a potential slowdown in the U.S. labor market. Companies added 150,000 jobs for the month, below the upwardly revised 157,000 in May and the Dow Jones consensus estimate for 160,000. The total was the lowest monthly gain since January.
Without the surge in leisure and hospitality hiring, the total would have been considerably lower. The sector added 63,000 jobs, easily the biggest gain among the categories that payrolls processing firm ADP measures.
2. U.S. economy added 206,000 jobs in June, unemployment rate rises to 4.1% — Nonfarm payrolls increased by 206,000 for the month, better than the 200,000 Dow Jones forecast though less than the downwardly revised gain of 218,000 in May, which was cut sharply from the initial estimate of 272,000. The unemployment rate unexpectedly climbed to 4.1%, tied for the highest level since October 2021 and providing a conflicting sign for Federal Reserve officials weighing their next move on monetary policy. The forecast had been for the jobless rate to hold steady at 4%. A broader unemployment rate which counts discouraged workers and those holding part-time jobs for economic reasons held steady at 7.4%. Household employment, which is used to calculate the unemployment rate, rose by 116,000. The household survey also showed a decrease of 28,000, in full-time workers and an increase of 50,000 in part-time workers.

The week ahead — Economic data from Econoday.com: