G20 Relief Party With Fireworks
The G20 Relief Party lasted through the Independence Day Holiday, with the market advancing for six straight days to reach a new record high on Wednesday. The very light volume suggested that many traders headed to their beach houses early in the week, and perhaps were in too high spirits to be disturbed by the surprisingly strong jobs report on Friday that pretty much eliminated the chance of a 50 basis point cut in rates at the upcoming Fed meeting. “No worries, 25 basis points is in the bag, pour me another Long Island Iced Tea please. What time do we tee off?” The yield on the Ten-Year Treasury, which had reached a multi-year low on Wednesday, jumped 10 basis points to 2.05% after the jobs report, as the bond traders seemed a bit more sober. The S&P 500 posted a very modest loss on Friday and finished the week up 1.65%. The Dollar rallied, while Gold and Oil both declined.
This Week:
The economic calendar is light, with Thursday’s release of June CPI forecasted to show an annual rate of core inflation to remain unchanged at 2.0%. Any surprises on that reading could influence the upcoming Fed decision on interest rates, particularly if there is an increase above the 2% level. Earnings season will begin with a trickle as four S&P 500 companies will report results. Overall results for the quarter are expected to be negatively affected by the uncertainty over supply chain and trade issues, with an estimated earnings decline for the S&P 500 of -2.6%. If earnings actually decline for the quarter, it will mark the first time the index has reported two straight quarters of year-over-year declines in earnings since Q1 2016 and Q2 2016.
Trade issues will continue to grab headlines, as China and the U.S. are expected to hold more talks via teleconference and a high-level U.S. trade delegation will be visiting India.
Stocks on the Move:
Related: How Long Can the Market Ignore the Troubling Headlines?
Portfolio holdings are subject to change and should not be considered investment advice.
North Star Investment Management Corp. is the Advisor for the North Star Family Mutual Funds.
Equities Contributor: IRIS.xyz
Source: Equities News