Week In Review 7.26.2019

GDP — Real GDP rose at a 2.1% annualized pace in the second quarter, which was stronger than economist forecasts calling for sub-2.0% growth, and higher than the Atlanta Fed’s 1.3% GDPNow estimate. Driving the stronger-than-expected growth figure was a surprising 4.3% increase in real personal consumption expenditures. Specifically, real spending on durable goods soared nearly 13%, the strongest sequential growth rate in five years, while expenditures on non-durable goods climbed 6.0%. Also, real consumer spending on services grew at a solid growth rate of 2.5%. Year-over-year, however, real GDP growth slowed to 2.3%, down from the 2.7% clip registered last quarter.Housing — New home sales rose 7% in June but sales for the prior three months were revised lower, leaving the level of new home sales well below consensus expectations. Existing homes sales, conversely, declined -1.7% in June. Despite the drop, sales of existing homes remain fairly solid, and lower mortgage rates will likely keep resales on an upward trend for the remainder of the year.

Durable Goods Orders — For the first time in three months, durable goods orders rose in June, helped along by an unexpected bump from aircraft orders. Overall, this report was viewed as a welcome reprieve, but the year-to-date downtrend in capital expenditures spending remains firmly negative.

International Trade in Goods — A -$136.3B decline in US exports led to a deeper-than-expected -$74.2 billion trade gap in June. Total exports on the year are down -3.7 percent, while imports are up only a marginal 0.2 percent, which in some respects supports the Fed’s case for a July 31 interest rate cut.

Online vehicle auction company Copart, the last remaining S&P 500 company with an all-male board of directors, announced the appointment of its first female board director.