Stock Market Update Wednesday July 3, 2024 Federal Reserve Chair Jerome Powell delivered dovish remarks in Sintra, echoing the tone from the June FOMC meeting. Our analysis suggests that markets will likely continue their rally. Recent data has supported the narrative of falling inflation, with the May ISM Prices Index, May CPI, and May PCE reports all indicating inflation is softening. Additionally, the June ISM report was weak, and the JOLTS data has returned to pre-pandemic levels, signaling that labor market conditions have stabilized.
On Thursday, the markets will be closed in observance of the July 4th holiday. The key data release this week is Friday's June jobs report. The crucial macro data, June non-farm payrolls, will be released at 8:30 AM, with expectations set at 191k. We anticipate the actual number will come in 50k below this estimate. This anticipated weakness should lead to a rally in Treasurys, bolstering what is already a seasonally strong July for stocks.
