Last Week’s Summary
- S&P 500 Index fell 1.11%
- International Equities fell 1.64%
- Emerging Markets fell 0.60%
- U.S. 10-Year Treasury Yield rose to 4.06%
- Initial Jobless Claims rose to 248k
- Change in Nonfarm Payrolls fell to 209k
- Unemployment Rate fell to 3.6%
What to Watch for This Week
- M, 7/10/23 Wholesale Inventories
- W, 7/12/23 MBA Mortgage Applications, CPI, CPI Core
- Th, 7/13/23 PPI, PPI Core, Initial Jobless Claims
- F, 7/14/23 U. of Mich. Sentiment
Weekly Market Recap
Despite the market holiday on Tuesday, markets experienced a decline of over 1% this week. The release of the jobs numbers further contributed to this downturn, effectively eliminating the possibility of the Federal Reserve keeping rates unchanged in the upcoming meeting. The labor market has become a critical factor in combating inflation, compelling the Federal Reserve to continue raising rates. The latest data from the ADP Research Institute revealed that U.S. companies added the highest number of jobs in over a year during June, accompanied by a slight decrease in the unemployment rate.
These indicators demonstrate the resilience of the labor market, despite the Federal Reserve’s efforts thus far. Earlier this week, the minutes from the June FOMC meeting indicated a division among Fed officials, with many in favor of a further rate hike at the previous meeting. This sentiment, coupled with the recent jobs data, has led the majority of market participants to anticipate a full rate hike at the July Fed meeting, scheduled for the last week of the month.
Looking ahead, market participants will focus on two key events in the coming week. First, the CPI print on Wednesday will provide important insights into the Federal Reserve’s likely course of action at the end of the month. Additionally, the start of the second earnings season will be marked by JP Morgan and Citi, setting the tone for forthcoming earnings announcements in the following weeks.
