Markets “In a Nutshell” for July 7, 2021
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 1.00%, the S&P 500 was up 1.70%, and the NASDAQ rose 1.90%. Foreign stocks (MSCI EAFE) were up as well, rising 1.00%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 1.43%. (Data source: Wall Street Journal)
Employment Data Comes in as Expected
Job gains beat expectations this past month adding 850,000 jobs but unemployment increased to 5.9%. These numbers came in near expectations as markets had little to no reaction to the numbers for June. Most of the job gains came in the leisure and hospitality which took the blunt of losses from the Pandemic. This shows the economy continues to open up and get back to a new normal as we move further from the pandemic. Although there were many new jobs added this past month there is still a lot of room for adding new jobs in the coming months and we’d expect unemployment to fall as unemployment benefits expire and kids are back in school full time this coming Fall. With many more people looking for employment there is no reason to believe the Fed will change its policies in the coming months which will allow for continued favorable economic policies.
Will a Strong First Half Continue into the Second Half of 2021
On Friday, the S&P 500 reached a new all-time high for the 36th time in this year alone. The S&P had its second best first half of the year since 1998. In the past 80 years’ equities rose 10% or more, 24 times in the first half. In those 24 instances the S&P 500 went on to average a 7% return in the second half of the year with equities being positive in the second half almost 80% of the time. History shows gains may not be as strong as they were in the first half but equities still have room to move up historically. With the drop in treasury yields this past week, tech and growth stocks led the way but as we move further into the year we expect to see yields rise and cause some slow down for tech and for the more cyclical and value stocks to be the leader.
What is the record percentage gain for the S&P 500 in a single calendar year? (Scroll Down for Answer)
Have a Great Week!
4. In 1954 the S&P 500 rose 52.56% making it the largest gain in the history of the S&P 500.