US financial markets were mixed last week as investors continued to dissect 2nd quarter earnings results and economic data. The notion of a soft landing in the economy resonated with investors even as global central banks are poised to increase their respective monetary policy rates in the coming week.
The Fed will announce its decision on Wednesday, July 26th, where it is widely expected that they will raise by 25 basis points and come out with moderating hawkish tone. The European Central Bank will also likely increase its policy rate by 25 basis points. Still, it will likely continue to be much more hawkish on its future path of monetary policy. The Bank of Japan is expected to keep an accommodative policy but may infer changes to their yield curve control measures to stave off a further weakening of the Yen. The Bank of England meets on August 3rd, where it is expected to raise rates to thwart inflation that is well above levels seen in the US and other parts of the EU. The divergence in policy is something we have talked about often, and this divergence is likely to become more meaningful over the next few quarters.
2nd quarter earnings announced over the week produced quite a bit of price action. Mega Cap issues such as Tesla and Netflix beat earnings expectations but sold off on cautious rhetoric from their leaders. There is also a concern that these “Magnificent Seven” names have traded to overbought levels and are due for a pullback. Taiwan Semiconductors’ quarter was solid, but the company warned of waning demand for their products while at the same time slowing the build of their Fab in north Phoenix due to a lack of supply of skilled labor. Financials were a bright spot last week as Bank of America, Schwab, Morgan Stanley, and several regional banks showed better-than-expected results. In the coming week, we will get earnings from stalwarts Google and Meta.
Economic data for the week showed a labor market that continues to be resilient. Initial claims came in at 228k, well below recessionary levels, while continuing claims ticked up slightly to 1754k. Retail sales came in lighter than expected, with the headline and ex-auto figures increasing by 0.2% versus 0.6% and 0.4%, respectively. Housing starts and building permits also came in less than expected. This week we will get data on the Fed’s preferred measure of inflation, the PCE. Final Q2 GDP figures will also be reported along with Personal Income and Spending.
The S&P 500 added 0.7%, the Dow rose 2.10% and inked its 10th straight of gains, the NASDAQ fell 0.6%, and the Russell 2000 increased by 1.5%. US Treasuries sold off after last week’s monster rally. The 2-year yield increased by thirteen basis points to 4.85%, while the 10-year yield jumped by seven basis points to close at 3.85%. Oil prices advanced 2.1% or $1.65, with WTI closing at $77.05 a barrel. Gold prices were little changed, closing at 1966.10 an Oz. Copper prices fell by $0.11 to $3.82 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.
