Stock Market Update Sunday July 7, 2024 The S&P 500 reached new heights last Tuesday, and both the S&P 500 and Nasdaq posted significant weekly gains to kick off the second half of the year. However, revisions to prior months' job data revealed a decelerating labor market, a potential boon for stocks given the current 'bad news is good news' sentiment among investors.
The minutes from the June 12, 2024, meeting of the Federal Open Market Committee were released last week. They indicate that although FOMC members still require more evidence of declining inflation, a number of officials are concerned that years of elevated rates could be taking a toll on the economy. They stressed that the Fed needs to be ready to respond quickly to any 'unexpected economic weakness.' Such sentiments are consistent with remarks made by Fed Chair Jerome Powell last week at the annual forum hosted by the European Central Bank. Powell noted that the respective risks of cutting rates too early (risking a resurgence of inflation) or cutting too late (thus weakening the economy) had become more balanced. Investors should leverage tools like our proprietary algorithm to navigate this uncertainty and make informed decisions based on individual risk tolerance and investment goals.
Large-cap technology stocks continue to push higher, and our analysis suggests further gains are possible heading into mid-July. Seasonality also supports this outlook: The first two weeks of July are typically strong, and historical data from past election years indicates that maintaining a long bias could be advantageous until August.
Important Macro Data This Week:
- **Tuesday, July 9th, 2024**
- 6:00 AM ET: June Small Business Optimism Survey
- 9:00 AM ET: June F Manheim Used Vehicle Index
- 10:00 AM ET: Fed’s Powell Testifies to Senate Banking
- **Thursday, July 11th, 2024**
- 8:30 AM ET: June CPI
- **Friday, July 12th, 2024**
- 8:30 AM ET: June PPI
- 10:00 AM ET: July P U. Mich. Sentiment and Inflation Expectation
