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July 1, 2019

Stocks enjoyed a month of strong growth as investors were encouraged by the Fed's decision to keep interest rates unchanged and hope for a resolution to the ongoing trade war between the United States and China. Each of the major benchmark stock indexes posted solid gains. During the month, the S&P 500 reached a record high, as did the Dow — this despite growing tensions between the United States and Iran.

Once again, the Federal Open Market Committee decided to maintain the federal funds rate at its current range of 2.25%-2.50%. Interestingly, one member of the voting Committee, St. Louis Fed President James Bullard, dissented in favor of lowering the target range for the federal funds rate by 25 basis points. The Committee noted that job gains have been solid, the unemployment rate has remained low, and household spending has picked up from earlier in the year. However, business fixed investment has been soft, and inflation is running below the Committee's 2% target rate.

Building permits for single-family homes jumped 3.7% in May over April's totals. The housing market finally may be picking up steam. Sales of existing homes rose 2.5% in May over April's revised total. The median existing-home price in May was $277,700 ($267,300 in April), up 4.8% from May 2018 ($265,100). Total housing inventory at the end of May increased to 1.92 million, up from 1.83 million existing homes available for sale in April. This represents a 4.3-month supply at the current sales pace, up from the 4.2-month supply in April.

For the week ended June 15, there were 216,000 claims for unemployment insurance which was a decrease of 6,000 from the previous week's level. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended June 8. The advance number of those receiving unemployment insurance benefits during the week ended June 8 was 1,662,000.

For the year the Dow, S&P 500 and NASDAQ are all ahead 14.03, 17.35 and 20.66 percent, respectively, while the 10-year Treasury is yielding 2.00 percent.