In Markets "In a Nutshell"

Markets “In a Nutshell” for July 15, 2024

Investment Week at a Glance

Stocks finished higher for the week. The Dow Jones Industrial Average rose 1.60%, the S&P 500 was up 0.90%, and the NASDAQ rose 0.20%. Foreign stocks (MSCI EAFE) were also up, rising 1.60%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.18%.  (Data source: Wall Street Journal)

Inflation Moves Lower

The June CPI report was released last week and came in at 3.0% year-over-year, once again moving lower. This is now the lowest reading since March of 2021, a positive sign for the economy as we get to more normal levels of inflation. The more data the market receives the higher likelihood of rate cuts coming in 2024 with lower inflation and unemployment on the rise. Core CPI (excludes food & energy) also ticked down to 3.3% which is another factor the Fed will look at as food and energy tend to be more volatile. Job openings and wage growth also has been moving lower and tend to move in unison over the past 3 years. As the Fed cuts rates, this will boost the overall economy but at the same time, the market hopes inflation doesn’t tick back up.

Market Broadening

Over the past couple of weeks, we have seen continued market broadening as the rest of the market tries to catch up with the tech sector. Sectors that have trailed the market the past few years such as real estate, utilities, and materials, were the big winners last week leading the market. Technology and communication services trailed the rest of the market which could be a sign of things to come going forward. When looking at the past 5 years tech has been up over 185% and led the market higher, it could be time for the rest of the market to play catchup and tech to take a breather. Earnings growth is expected to also support this as financials are expected to lead the way as far as earnings growth by the 4th quarter. Technology is still expected to have strong growth, just not as much as we have seen in recent years.

Quiz:

How much federal debt does the U.S. have? (Scroll Down for Answer)

  1.    $27 Trillion
  2.    $31 Trillion
  3.    $35 Trillion
  4.    $41 Trillion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer:

3.   $35 Trillion. The national debt is one of the major long-term worries for the market. Expect to hear a lot about the debt and how to fix it in the coming months as election season comes around.