Market Summary – July 31, 2023

Last Week’s Summary

  • S&P 500 Index rose 1.03%
  • International Equities rose 1.39%
  • Emerging Markets rose 2.85%
  • U.S. 10-Year Treasury Yield rose to 3.95%
  • FOMC hiked rates 25 basis points
  • Initial Jobless Claims fell to 221k
  • Q2 2023 GDP rose to 2.4% YoY

What to Watch for This Week

  • M, 7/31/23 MNI Chicago PMI
  • T, 8/1/23 S&P Global US Manufacturing PMI
  • W, 8/2/23 ADP Employment Change
  • Th, 8/3/23 Initial Jobless Claims, Factory Orders
  • F, 8/4/23 Change in Nonfarm Payrolls, Unemployment Rate

Weekly Market Recap

Mega caps spearheaded gains in the equities market, driving the S&P 500 Index up 1% and marking its third consecutive weekly advance. The large-cap equity index is now within 2% of its all-time high from 2022. One of the big drivers in market activity this week was the Federal Reserve’s decision to reignite their rate hike cycle, implementing a 25-basis point rate hike and bringing rates to their highest levels in 22 years.

While the Fed remains data-dependent, investors are anticipating the possibility of one last rate hike. Two-Year Treasury Yields, which are highly sensitive to changes in monetary policy, dropped five basis points to 4.87%. Fed Chair Jerome Powell said his staff had ditched the recession forecast it put in place in March, when banking turmoil had raised fears about a potential credit crunch.

The likelihood of the Federal Reserve effectively managing inflation without encountering a recession seems promising. In the second quarter, U.S. GDP gained momentum, indicating a resilient economy. Additionally, the easing of the Personal Consumption Expenditure Deflator Index, the Fed’s preferred measure of inflation, to 3% adds to the positive outlook.

International equities gained as the European Central Bank raised interest rates by another quarter-point, and President Christine Lagarde expressed an “open mind” on future actions. The Bank of Japan’s discussions on letting its 10-Year Yield rise beyond its 0.5% cap affected markets, leading to fluctuations in rates and stock performances.

Download Market Snapshot July 24, 2023

Watch our Intro Video! Learn a better way to invest:

Market Summary

Subscribe to Our Perspectives