Economic and market updates

Economic Update for June 19, 2017

Highlights of news-making events of the past week, from the economy and profits to Europe and interest rates.

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economy

The Commerce Dept. reported retail sales fell 0.3%, business inventories declined 0.2%, and housing starts dropped 5.5% in May. The BLS noted the CPI fell 0.1%, core CPI rose 0.1%, and both import and export prices declined in May. The Fed noted industrial production was flat in May. China's National Bureau of Statistics found producer prices jumped 5.5% year over year in May.

employment

Initial jobless claims fell by 8,000 to 237,000 in the week ended June 10, 2017, the Labor Department reported. The four-week moving average was 243,000.

profits

As of June 8, 2017, of the total S&P 500 Index companies reporting first-quarter earnings, 371 — or 74% — beat analysts' estimates, according to S&P Dow Jones Indices.

emotion

The University of Michigan preliminary index of consumer sentiment dropped to 94.5 in June from 97.1 in May, marking the lowest level since November. The Bloomberg Consumer Comfort Index rose to 50.0 in the week ended June 11, 2017, from 49.9 in the prior week.

europe

Eurostat reported industrial production rose 0.5% in April, and employment increased 0.4% in the first quarter. Annual inflation was 1.4% in May, down from 1.9% in April. The euro area posted a trade surplus in April. Germany's Federal Statistical Office stated that consumer prices rose 1.5% in May. The ZEW Indicator of Economic Sentiment for Germany declined in June.

rates

The yield on the 10-year U.S. Treasury note declined. The Federal Reserve decided to raise the federal funds rate target range to 1.0%-1.25%. The Bank of England maintained its bank rate at 0.25%. The Bank of Japan held rates steady.

risks

  • Uncertain timeline on key U.S. pro-growth measures
  • Leading indicators of Chinese nominal growth rolling over
  • Mismatch between low volatility market environment and policy uncertainty

All economic and performance information is historical and does not guarantee future results. The views and opinions expressed are those of Putnam Investments, are subject to change with market conditions, and are not meant as investment advice.

Your clients should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus containing this and other information for any Putnam fund or product, call Putnam at 1-800-354-4000. Your clients should read the prospectus carefully before investing.