 | AUTHOR: Jason Roque, CFP®, APMA®, AWMA® TITLE: Investment Adviser Rep – CCO TAGS: S&P 500, NASDAQ, FRB, Consumer Confidence, Goods |
Markets rallied again this past week. Will strong economic data continue to outweigh the hawkish tone set by the FRB or will this rally be short-lived?
Monday S&P 500 0.45% | NASDAQ 1.16%
Equity markets slipped and oil markets saw gains. This followed the weekend news of a near revolt by Wagner. The concerns in Ukraine and Russia led to a strengthening of oil prices. Equity markets continued the tech sale from last week that was ignited by a Federal Reserve Board (FRB) that is appearing more hawkish.
Tuesday S&P 500 1.09% | NASDAQ 1.56%
Economic data released Tuesday signaled continued strength in the economy. Consumer Confidence and Core durable goods orders both beat expectations. Additionally, Delta reported strong demand, a good bell weather for continued consumer spending.
Wednesday S&P 500 0.04% | NASDAQ 0.27%
Chip stocks and the Federal Reserve Board (FRB) ruled the day. Chip stocks struggled as potential restrictions on exports to China were weighed. A hawkish tone from FRB Chair Powell led to muted market performance. The Chair stressed the need for rates to remain elevated for a prolonged period.
Thursday S&P 500 .45% | NASDAQ 0%
Headlines for the day surrounded the Federal Reserve’s annual stress test of U.S Banks. The test provides insight on whether banks can withstand major economic downturns. Major banks passed and most bank stock prices rose with the news which cooled any queasy feelings on the strength of the banking sector, at least for now.
Friday S&P 500 1.23% | NASDAQ 1.45%
Attention shifted to the tech sector with Apple becoming the first company to surpass a market capitalization of $3 Trillion (yes, with a T). Consumer spending data was also released on Friday which weakened in May. With stagnating wage increases, it will be interesting to see how discretionary spending patterns on high-priced items change in Q3.
Conclusion S&P 500 2.28% | NASDAQ 2.12%
In a week full of big news-releases, markets surged into the weekend. The signs of continued economic resilience presumably locks in a rate hike by the Federal Reserve at their July Meeting in their attempt to alleviate price pressure while also keeping the economy humming at a healthy rate. Other notable news for the week included the Supreme Court’s decision to require student loan payments to resume in October 2023 following a 3+ year deferment. As payments start back up, consumer spending may be tested as household budgets redirect monthly cash flow.
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