It was a busy week on Wall Street with announcements of monetary policy decisions from the Federal Reserve, European Central Bank, and the Bank of Japan, along with an active calendar of Q2 earnings announcements and economic data.
As expected, the Federal Reserve raised its policy rate by twenty-five basis points to 5.25%-5.50%. Fed Chairman Jerome Powell continued to push back on the notion that the Fed was finished with the rate hikes. Instead, he suggested the Fed will remain data-dependent and craft policy to achieve its price stability and full employment mandates. The Fed Funds futures now price in a 29.7% probability of a 25 basis point by November. The European Central Bank also increased several of its policy rates by a quarter point but came across as more dovish than expected, with some speculating the ECB could be done with its hiking cycle. The Bank of Japan kept its policy rate the same but surprised markets by announcing it would loosen its yield curve control. The news had been rumored early in the week and perhaps was one catalyst for the sell-off on Thursday. However, the Yen was little changed against the US Dollar for the week, and markets seemed to shrug off the announcement on Friday. Investors will hear from the Bank of England this week, where the BOE is expected to announce a fifty basis point hike.
Q2 earnings continued to flood in, and the margin continued to impress. Meta and Google were highlighted this week with better-than-expected results and strong guidance, which propelled their stocks higher. Boeing, J&J, and P&G also had solid results. Microsoft was a bit of a disappointment but beat expectations, just not by enough, given the recent run-up in the name. The coming week will be the busiest so far this earnings season.
The economic calendar was packed. PCE, the preferred measure of inflation, showed that headline and core prices in the data set have moderated on a year-over-year basis. The headline number came in up 0.2%, in line with expectations, while it fell to 3% year-over-year from May’s level of 3.8%. Similarly, the Core number was up by 0.2% in June, in line with estimates, and fell to 4.1% from Mays’s figure of 4.6%. Advanced estimate of Q2 GDP impressed with a growth rate of 2.4% versus expectations of 1.8%. The GDP Deflator came in at 2.2%, less than the 3.1% estimate. Personal Income came in at 0.3%, below the estimated 0.4%, while Personal Spending came in better than expected at 0.5% vs. 0.3%. Consumer Confidence was much better than anticipated at 117, and the Final Reading of Consumer Sentiment from the University of Michigan showed significant improvement from June, coming in at 71.6 from 64.4. Initial claims came in at 221k, and Continuing Claims fell to 1690K.
The S&P 500 gained 1%, the Dow added 0.7%, the NASDAQ jumped 2%, and the Russell 2000 increased by 1.1%. US Treasury yields increased across the curve. The 2-year yield increased by five basis points to 4.9%, while the 10-year yield rose by thirteen basis points to 3.97%. West Texas Intermediate crude price rose by 4.5% or $3.49 to close at $80.54 a barrel. Gold prices fell by $6.20 to $1960.30 an Oz. Copper prices increased by $0.10 to 3.92 a Lb.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Investment advisory services offered through Donato Wealth Management, PLLC, dba Empower Wealth Management and Empower Wealth & Tax (“Empower Wealth Management” or “EWM”),
an SEC registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional adviser before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned, or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Personal investment advice can only be rendered after the engagement of EWM, execution of required documentation, and receipt of required disclosures. All investment and insurance strategies have the potential for profit or loss. Asset allocation and diversification will not necessarily improve an investor’s returns and cannot eliminate the risk of investment losses. Past performance is no guarantee of future results. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD #305031.
Insurance products and tax services are offered through Senior Tax and Insurance Advisors, PLLC, dba Empower Wealth Group (“Empower Wealth Group” or “EWG”). Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products offered through EWM. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. EWG is not affiliated with or endorsed by the U.S. Government, Social Security Administration, nor the federal Medicare program. You may be contacted by a licensed insurance agent. Calling the number above will direct you to a licensed insurance agent. EWG may not offer every plan available in your area. Any information provided is limited to plans available in your area. Please contact Medicare.gov or 1-800-MEDICARE.
EWM and EWG are both affiliated companies of Empower Wealth, LLC (“Empower”). Investment adviser representatives of EWM may have a financial incentive to recommend tax and insurance products and/or services offered through EWG which presents a conflict of interest. This conflict is addressed by EWM’s adoption of its Code of Ethics, which requires that all EWM’s Associated Persons place the interest of clients ahead of their own. Clients of EWM are also free to choose their own tax and/or insurance professionals and are under no obligation to utilize the services offered through any related entities or persons associated with Empower.
Strategic Partners listed on this page are not employees of EWM and are not affiliated through common ownership.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
© Empower Wealth Management All Rights Reserved.
