Economic and market updates

Economic Update for June 18, 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

  • Both import and export prices increased in May, according to the Bureau of Labor Statistics.
  • The CPI and core CPI both rose 0.2% in May, the Bureau of Labor Statistics found.
  • In China, the Producer Price Index increased 4.1% year over year in May.

employment

  • Initial jobless claims fell by 4,000 to 218,000 in the week ended June 9, 2018, the Labor Department reported.

profits

  • As of June 6, 2018, of the 498 S&P 500 Index companies reporting first-quarter earnings, 382 — or 76.7% — beat analysts’ estimates, according to S&P Dow Jones Indices.

emotion

  • The NFIB Small Business Optimism Index increased in May.
  • The University of Michigan’s index of consumer sentiment rose to 99.3 in June from 98.0 in May.
europe

  • The euro area posted a trade surplus in April, Eurostat reported.
  • Euro area annual inflation rose to 1.9% in May from 1.3% in April, Eurostat stated.
  • Industrial production in the euro area fell by 0.9% in April, Eurostat found.
  • In Germany, consumer prices increased 2.2% in May, according to the Federal Statistical Agency.

rates

  • The yield on the 10-year U.S. Treasury note traded in a narrow range.
  • The Federal Reserve raised the target range for the federal funds rate.
  • The European Central Bank maintained the current benchmark interest rates.
  • The Bank of Japan kept monetary policy steady.

risks

  • Strengthening U.S. dollar, rising interest rates, and oil prices may begin to pressure select emerging markets.
  • Higher hedging costs for European and Asian investors are weighing on U.S. credit spreads.
  • Political uncertainty in Italy may re-open wounds of the European sovereign credit crisis.

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.