07|07|2021

Summer Concern? | July 2, 2021

AUTHOR: Jason J. Roque, MS, CFP®, APMA®, AWMA® TITLE:       Investment Adviser Rep – CCO TAGS:   S&P 500, Earnings, Housing, Jobs, PMI

Markets rose steadily all week. Does this bode well for the summer months, or should we be concerned?

Monday

Markets were mostly up on Monday. Investor sentiment was buoyed by an announcement from the largest US banks. They announced that they will resume dividends as the Federal Reserve Bank (FRB) has lifted the moratorium.

Last year’s stress test result in healthy balance sheets, however, to be safe, the FRB had Banks suspend dividends. After this year’s stress test the FRB announced a return to dividends would be permitted.

Tuesday

The S&P 500 rose to an all-time high again on Tuesday, albeit a meager gain. In a continuation from Monday the Small Cap markets again shed weight while the large indices continued to gain. CB Consumer Confidence unexpectedly jumped to a pandemic high of 127.3.

Wednesday

The S&P 500 continued its record setting gains on Wednesday. Pending home sales jumped in June, however there are underlying indicators showing the housing market is slowing down.

Thursday

The fresh record highs each day continued for the S&P 500. The S&P was not alone as all major indices pointed north on Thursday. There was much optimism on the job front as early data looked good. Friday brings the full jobs report.

Friday

Markets jumped on Friday. The S&P 500 rose 0.8% on the day, with only the Small Cap markets retreating. While the unemployment rate crept up in June to 5.9% (from 5.7%), the private payroll adds were impressive. The increase in the unemployment rate post-recession is not surprising. Those who were not looking for work begin to rejoin the job market and increase this measure of unemployment.

Conclusion

Markets rose nicely for the week. The S&P 500 gained 71.64 points, or 1.67% on the week. More impressive was perhaps the sustained run of growth across the entire week. Although early in the week the movements were modest the sustained upward trend is a positive signal for investor mentality. The struggle is that we are moving into the summer months where volumes tick down and volatility can tick up.

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