Economy
Weekly initial claims for unemployment insurance fell to the lowest level in 3 months, the latest sign of a healthy labor market. Jobless claims had risen steadily, peaking in early June, but have since fallen back down. While the rate of layoffs has slowed, hiring has also slowed this year. Next Friday (August 1) we will see how many net new jobs were created for the month of July. The expectation is for somewhere around 100,000 jobs, which would be lower than the previous month's number of 147,000. Ahead of the jobs report, Wednesday will be a big day for my fellow macro econ nerds as we'll get a reading on US gross domestic product (GDP) in the morning followed by a Jerome Powell press conference in the afternoon when the Fed announces its decision on interest rate policy. The CME FedWatch Tool shows the market is expecting no change in rates.
Markets
In baseball, the term "immaculate inning" describes a situation where a pitcher strikes out all 3 batter he faces using just 9 pitches, all thrown for strikes. It's a rare feat to have an unblemished accomplishment. This week, the S&P 500 had what I'd consider its equivalent immaculate week which saw the market not only rise for 5 consecutive days, but what makes it even more remarkable is that we saw new all time highs for the index every day this week. The last time this happened was nearly 4 years ago in November 2021. The result of this immaculate week was a gain of 1.46% for the index. We are about 1/3 of the way through earnings season, and so far the results have been slightly better than expected. FactSetreports 80% of S&P 500 companies that have reported results have beat their estimates, and the projected growth rate for corporate earnings is now above 6% for the quarter. This would mark 8 quarters in a row of earnings growth, and Wall Street's expectation is for earnings growth to accelerate into next year (this is just an estimate and subject to change). Next week is primetime for earnings as we'll hear from Meta, Microsoft, Amazon, and Apple.
What We're Reading
- Wall Street's Big Bad Idea for Your 401k - Jason Zweig
- Ferrari Status - Ted Lamade
Have a great weekend.
Dogwood Wealth Management