US financial markets were able to log another set of all-time highs as investors cheered a weaker-than-anticipated Consumer Price Index report that signaled more progress on the inflation front. The US Treasury market rallied nicely on the news and sent a bid into parts of the market that have lagged over the year’s first six months of 2024. Mega Cap stocks took a back seat as the equal-weighted S&P 500 index outperformed alongside a massive upside move in small-caps.
The week started and progressed with more calls from congressional democrats and donors for President Biden to abandon his bid for another term. The President has pushed back on the calls and insists he will continue running for office. The uncertain political landscape increased on Saturday night in Pennsylvania when former President Trump was escorted from a rally after it sounded like gunshots were being fired. The current uncertain political landscape will likely increase market volatility.
Fed Chairman Powell was on Capitol Hill this week, but his testimony in front of the Senate Banking Committee and the House Financial Services Committee yielded very little new information.
The money center banks kicked off earnings season with better-than-expected results. However, with high expectations and decent gains already made in some of these names, investors sold shares after announcing the results. Pepsi announced disappointing results and offered tepid guidance on concerns over consumer spending.
This week, the S&P 500 added 1%, the Dow increased by 1.6%, the NASDAQ lagged with a 0.3% advance, and the Russell 2000 rocketed 6% higher. US Treasuries gained ground that favored the short end of the yield curve. The 2-year yield decreased by fourteen basis points to 4.46%, while the 10-year yield fell by eight basis points to 4.23%. The lower move in yields came from a weaker-than-anticipated June CPI print that increased the likelihood of a September rate cut to nearly 94% and increased the chances of another rate cut in December.
Oil prices fell by 1.2%, or $1.04, to close at $82.19 a barrel despite further data showing larger-than-expected inventory drawdowns. Gold prices topped $2400, closing at $2420 an Oz. Copper prices increased by $0.06 to close at $5.493 per Lb. Bitcoin was able to bounce off its most recent lows and close just north of $57k a coin. Notably, the Bank of Japan finally intervened in the currency market, defending the Yen, and interestingly seemed to coordinate the move after the cooler-than-expected CPI print hit the tape. The $/Yen cross closed the week at 157.86. The US Dollar index fell by 0.8% to 104.44.
The economic calendar was again focused on inflation data scheduled to be released in the second half of the week. As mentioned, the CPI print came in cooler than expected on both the headline reading and the core reading, which excludes food and energy. Both data sets showed inflation moderating on a year-over-year basis, with the headline print showing an increase of 3% versus 3.3% in May, while the Core reading increased by 3.3% from 3.4% over the same time frame. Interestingly, the PPI, or Producers Price Index, came in hotter than expected, and the prior month’s data were revised higher. The PPI came in at 0.2% versus 0.1%, while the Core reading increased by 0.4% versus 0.1%. On a year-over-year basis, PPI increased by 2.6% in June, up from 2.2% in May. The Core reading increased by 3% over the last year, up from 2.3% in May. The hotter-than-anticipated PPI prints hit the market after its release, but investors bought the dip on the increased expectations of a rate cut in September. Initial Jobless claims fell by 17k to 222k, while Continuing Claims fell by 4k to 1.852M.
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.
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.
