Economic and market updates

Economic Update for August 20, 2018

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

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economy

  • Housing starts rose 0.9% in July, the Census Bureau stated.
  • Business inventories grew 0.1% in June, the Census Bureau announced.
  • The Federal Reserve noted that industrial production advanced 0.1% in July.
  • Import prices remained stable while export prices declined 0.5% in July, according to the Bureau of Labor Statistics.

employment

  • Initial jobless claims fell by 2,000 to 212,000 in the week ended August 11, 2018, according to the Labor Department.

profits

  • As of August 10, 2018, of the 456 S&P 500 Index companies reporting second-quarter earnings, 357 — or 78.3% — beat analysts’ estimates, according to S&P Dow Jones Indices.

emotion

  • The University of Michigan’s index of consumer sentiment declined to 97.9 in July from 98.2 in June.
  • The NFIB Small Business Optimism Index rose to its second-highest level in the survey’s history in July.

europe

  • Euro area GDP rose 0.4% in the second quarter, according to Eurostat.
  • Industrial production declined in the euro area in June, Eurostat reported.
  • Germany’s GDP grew 0.5% in the second quarter, the Federal Statistical Office noted.
  • The euro area posted a trade surplus in June, Eurostat found.

rates

  • The yield on the 10-year U.S. Treasury note traded in a narrow range.

risks

  • The strengthening U.S. dollar, widening credit spreads, and higher oil prices are putting pressure on select emerging-market countries.
  • Worries of dwindling global spare capacity in oil production may cause prices to spike, risking an inflation scare.
  • The Fed appears to be on course to invert the yield curve.

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.