Investment Week at a Glance

Stocks finished up last week. The Dow Jones Industrial Average was up 0.6%, the S&P 500 was up 0.3%, and the NASDAQ rose 1.0%. Foreign stocks (MSCI EAFE) were also up for the week, rising 0.1%. Bond prices were down for the week, with the 10-year U.S. Treasury yield ending the week at 4.75%. (Data source: Wall Street Journal)

FOMC Holds Interest Rates Steady, Despite 3 Members Voting for a Rate Hike

On July 29th, the Federal Reserve’s Federal Open Market Committee (FOMC) voted 9-3 to maintain the current target range for the federal funds rate at 3.50-3.75%. However, this decision was not made easily due to rising energy costs, as a two percent inflation target remains a goal for the Fed. While the conflict in the Middle East is exerting inflationary pressure on the economy overall, capital investment remains strong, and the unemployment rate has changed very little.

30-Year Mortgage Rates Hit Highest Level in Over a Year

Last week, the average 30-year fixed-rate mortgage hit 6.66%, making it the highest level in over a year. Higher mortgage rates increase payments for homebuyers, limit their purchasing power, and often delay home purchases. The borrowing rate on the 15-year mortgage also rose to 6.04%. Several factors, including monetary policy, inflation expectations, and demand from bond market investors, influence mortgage rates.

UnitedHealth Group Stock Up Over 25% Year to Date, and 58% in Last Year

UnitedHealth Group (UNH), one of the largest insurance companies in the United States, has performed well in the last year as its stock price has risen by over 58%. The company released its Q2 earnings on July 16th and reported earnings per share of $6.38, well above analysts’ estimates of $4.92 (UNH Investor Relations). While UnitedHealth Group is the largest company in the healthcare sector by total revenue, its low profit margins relative to its peers and the potential regulatory risk associated with the business are two things for its investors to keep a close eye on in the future (CNBC).

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Quiz

What has the NASDAQ returned in the last 5 years? (Scroll Down for Answer)

1.    72%
2.    66%
3.    59%
4.    53%

Answer:

1. 72%, The NASDAQ Composite has risen over 72% since August of 2021. While experiencing several episodes of volatility over the last 5 years, the technology-heavy index has reflected the rapid earnings growth and innovation within the technology sector.

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