NEW HEIGHTS: The Dow Jones Industrial Average topped 27,000 for the first time this past week, and it kept climbing, closing the week at 27,332. The S&P 500 closed above 3,000 for the first time ever on Friday. Fears of recession appear to have abated, helped by the Fed which has been indicating since early June that it could respond to any economic deterioration by cutting interest rates. There were worries that recent good news regarding the labor market and China would influence Fed Chair Powell to begin to reverse his language on being accomodative, but he did just the opposite. He downplayed recent improvements and pointed to lack of inflation indicating that the Fed’s accomodative attitude is intact, and markets responded positively.
SOME UPBEAT EUROZONE DATA: Eurozone industrial production grew in May with all the major economies reporting a monthly expansion. Data released on Friday showed industrial production grew by 0.9% compared to the previous month. All of the major eurozone economies reported rising industrial output compared to the previous month, with a particularly strong reading from France, where it grew by 2.1%.
NO SURPRISE, OIL PRICES RISE: Summer demand for gasoline and oil-related energy products is in full swing. Tropical storm season is playing out in the Gulf of Mexico, disrupting supply. And the Middle East is being the Middle East. Oil prices rose approximately 5% last week.
HOTEL INDUSTRY IS CRUISING: So far hotel occupancy is tracking last year’s record year. The average daily rate for a hotel room is $127.31, 2.6% higher than last year. Revenue per available room is up 5.2% from last year.
U.S. DEFICIT SPENDING WIDENS: The U.S. budget deficit grew 23% in the first nine months of the fiscal year as spending outpaced revenue growth. A strong economy typically leads to narrower deficits, as rising household income and corporate profits help boost tax collections, while spending on safety-net programs tends to decline. Instead, annual deficits are on track to exceed $1 trillion over the next few years.
HOTEL INDUSTRY IS CRUISING: https://www.calculatedriskblog.com/2019/07/hotels-occupancy-rate-increased-year.html
NEW HEIGHTS: https://www.wsj.com/articles/asian-european-stocks-tick-higher-11562918503?mod=hp_lista_pos3
SOME UPBEAT EUROZONE DATA: https://www.ft.com/content/da0ccf12-a484-11e9-974c-ad1c6ab5efd1
U.S. DEFICIT SPENDING WIDENS: https://blogs.wsj.com/economics/2019/07/12/real-time-economics-the-fed-is-going-to-cut-inflation-says-hello-and-trump-knocks-bitcoin/?guid=BL-REB-39530&dsk=y