Weekly Review | Jun 30 to Jul 7

Approved for release July 10, 2014

Market Indices

Index Jun 30, 2014 Jul 7, 2014 Change Percent
DJIA 16852.49 17068.26 215.77 +1.28
Nasdaq 4398.37 4485.93 87.56 +1.99
S&P500 1960.79 1985.44 24.65 +1.26
Russell 2000 1188.41 1208.15 19.74 +1.66
Russell 1000 910.51 923.97 13.46 +1.48

Equity Review

The U.S. stock markets closed at record highs in a short week due to the July 4th holiday.  The Dow Jones finished 1.3% higher for the week, closing at 17,068.26.  The S&P 500 also gained 1.3% for the week, finishing at 1,985.34 and recorded the fifth consecutive month of gains and biggest second quarter gain since 2009.  The benchmark index gained 3.9% over the month and 5% for the quarter.  The Dow Jones gained 1.9% in June and 2.2% for the second quarter of 2014.  For the first half of the 2014, the S&P 500 is up 6.1% and the Dow Jones is up 1.5%.  PetSmart shares rose 12% last week after the company announced that a hedge fund acquired a 10% stake in the company.  Jana Partners plans to hold discussions over potential strategic moves to enhance shareholder value, including a possible sale of the company.  Halliburton Company reported a 5% increase in first quarter revenue to $7.3 billion.  Earnings were $622 million or $0.73 per share, compared to a net loss of $0.01 a year ago, due to a $1 billion charge related to the Deepwater Horizon 2010 explosion.  Analysts say Halliburton is the best positioned oil-field services company to see revenue, margin and return growth over the next several years.  The Houston-based company is a major provider of hydraulic-fracturing services, also known as “fracking”, which has played a big role in the remarkable expansion of U.S. oil and natural gas over the past decade.

Economic Indicators

Jobless Claims (4 wk avg)
-0.16 Jul 5, 2014 315,000
Jun 28, 2014 314,500
Monthly Job Gains
June 2012 288,000
May 2012 224,000
ISM Manufacturing Index
-0.18 June 2012 55.3
May 2012 55.4
ISM NonManufacturing Index
-0.53 June 2012 56.0
May 2012 56.3

Economic Review

Last month the U.S. economy created 288,000 jobs, recording a fifth straight gain of over 200,000. In addition, the unemployment rate fell from 6.3% to 6.1%, the lowest rate since 2008. Economists say the strong jobs report is further evidence that the economy continues to build momentum after a surprising rough patch in the first quarter when U.S. growth contracted by 2.9%. In June, professional services jobs increased by 67,000. Retailers hired 40,000 workers and restaurants added 33,000. Health care added 21,000, and manufacturers took on 16,000 additional workers. The finance industry created 17,000 jobs, the largest increase in twenty-seven months. Meanwhile, unemployment claims increased by 2,000 to 315,000 in the week ended June 28. The forecast was 314,000 claims. The four week average also rose to 315,000. The U.S. oil benchmark fell 2% for the week. Oil for August delivery settled at $104.06 a barrel. One analyst remarked, “Now that the bears are in control and have momentum on their side, we will likely continue to pull back into the major moving averages. But, looking past the near term, crude prices will remain elevated as long as economic data remains strong and demand is set to continue rising.” Due to tensions in Iraq, gas prices as the pump are at the highest Independence Day prices since 2008. Gas prices typically fall in June, but we didn’t see that this year due to the renewed conflict in Iraq. Most consumers are paying about fifteen to twenty cents more per gallon than they would have been paying otherwise.

U.S. Bonds

Two Year Note 0.520

Ten Year Note 2.632

30 Year Bond 3.456

Currencies & Commodities

Euro 1.3592

Pound 1.7116

Yen 101.88

Canadian Dollar 1.0640

Crude Oil 103.82

Gold, Aug 1315.1

Economic Calendar

Tuesday

NFIB Small Bus Optimism Index 97.0

Consumer Credit $17.5 B

Thursday

Wholesale Trade 0.6 %

Friday

Treasury Budget $86.5 B

*Actual consensus values reported.

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