The current Weekly Financial Market Review looks at key market news: Continuous Decline for Leading Indicators, Retail Sales Expansion Slows Down in June, Limited Supply Inhibits Home Sales.
The Leading Economic Index saw a 0.7% drop in June, marking its 15th consecutive fall
Retail sales witnessed a slight increase of 0.2% from May to June
A 3.3% reduction from the previous month was observed in existing home sales for June
Main Market News:
Consistent Decline in Leading Indicators: The Conference Board revealed that the Leading Economic Index (LEI), a combined measure of ten economic indicators in the U.S., had a 0.7% decrease in June from the previous month. This decline is the 15th in a row, a trend not witnessed since the 2007-08 period. This drop is largely due to lower consumer expectations, weaker new orders, a rise in initial unemployment claims, and a reduction in housing construction. The Conference Board suggests that this data indicates a likely slowdown in economic activity in the upcoming months.
Slowdown in Retail Sales Growth in June: The pace of growth in spending at U.S. retail and food service outlets in June was the slowest in the past three months. According to a report from the U.S. Department of Commerce, retail sales for June only increased by 0.2%, a decrease from the rises in May (+0.5%) and April (+0.4%). Even though online sales saw a 1.9% increase in June from the previous month, a decline in sales at gas stations (-1.4%) negatively affected the total sales figure. Year-on-year sales only grew by 1.5%, also negatively influenced by lower gas station sales (-22.7%) primarily due to reduced gas prices this year.
Limited Supply Hinders Home Sales: The National Association of Realtors (NAR) stated last week that existing home sales in June dropped to a seasonally adjusted annual rate (SAAR) of 4.16 million, a 3.3% decrease from the previous month and a significant 18.9% drop from June of the previous year. The factors negatively affecting sales activity include higher mortgage rates and a scarcity of homes for sale. Despite the reduction in sales volume, the shortage of supply has contributed to the maintenance of housing prices: NAR reported that the median existing home sales price in June was $410,200, the second-highest since January 1999, and just slightly lower than the record high of $413,800 in June of the previous year.
