Economy
This was a pretty uneventful week in terms of economic data reports. It's worth noting that initial claims for unemployment insurance have fallen for four consecutive weeks. On the tariff front, this past Tuesday supposed to be the end of the original 90-day pause put in place by president Trump back in April. Reports suggest that heading in to the self-imposed deadline, Treasury secretary Scott Bessent advised president Trump to further delay implementing tariffs until August 1 to allow for more time to get deals struck with foreign trading partners. Instead of tariffs being activated this week, letters were sent to several nations warning of what the tariff rates would be in August should they fail to meet the administration's demands. Heading in to next week, we'll have some important data on inflation for the month of June which could have implications on when we see the Fed's next rate cut.
Markets
The S&P 500 declined slightly by 0.31% this week as we head into earnings. Markets appeared completely unphased by any tariff-related news this week. In fact, a new all-time high close was seen on Thursday for the S&P 500. Next week will be the official start of Q2 corporate earnings season. John Butters at FactSet reports that Wall Street analysts have reigned in expectations for corporate earnings due to concerns about inflation and tariffs. Despite these adjustments in expectations, earnings are projected to grow by mid-to-high single digits in the back half of the year. These concerns existed earlier in the year, and companies reported higher-than-expected results for Q1. With the looming tariff enforcement date quickly approaching, expect to hear plenty of the "T" word on corporate conference calls over the next several weeks.
What We're Reading
- Extreme Concentration in the S&P 500 - Torsten Sløk
- Is Gen Z Out of Luck Financially? - Ben Carlson
Have a great weekend.
Dogwood Wealth Management