Markets “In A Nutshell” for July 10, 2023

Markets “In a Nutshell” for July 10, 2023

Investment Week at a Glance

Stocks finished lower for the week.  The Dow Jones Industrial Average fell 2.00%, the S&P 500 was down 1.20%, and the NASDAQ fell 0.90%. Foreign stocks (MSCI EAFE) were also down, falling 2.6%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.06%.  (Data source: Wall Street Journal)

Labor Market Remains Strong

The US labor market has been a strength of the economy for the past couple of years despite the rise in interest rates. The June jobs numbers came out last week and remained strong as the economy added 209,000 jobs and unemployment is now 3.6%. Unemployment has now been in the 3.4% to 3.7% range since March of 2022 as the job market remains strong after the peak unemployment, we saw during Covid of nearly 15%. Wage growth also was higher than expected at 4.4% compared to estimates of 4.2%. Although this is good for the consumer it does cause some worry about inflation and the Fed raising rates as they want wage growth around 3.5%. There is some possible weakness showing in the labor market as jobless claims have picked up and total job openings begin to move lower. This could slow wage growth and satisfy the Fed.

Manufacturing vs Services

Manufacturing sectors continue to weaken as service sectors continue to expand recently. This disconnect is due to the pent-up demand people had from Covid of wanting to travel, eat out, and go and experience things rather than buy new goods. The US economy is made up of 75% of services so the demand for services has helped keep the economy and GDP in an expansion mode. If we begin to see this demand slow it may cause the economy to contract as many areas would be slowing. The manufacturing sectors also tend to be more sensitive to higher interest rates which is another current headwind facing those sectors.

Quiz:

Quiz

How much is the Dow Jones up for the year? (Scroll Down for Answer)

1.     2%
2.     7%
3.     12%
4.     17%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

Answer:

1.   2%.   The Dow Jones is only up 2% for the year which shows how contracted some of the gains have been for the year. Technology has driven the overall market higher but many companies have not seen their stock increase a ton this year as there have been many stocks that have not performed well for 2023.