Summer breeze. Legislative lift.
Most major market indices finished higher during last week’s holiday-shortened week.
For the week, the DJIA gained 2.34% while the S&P 500 added 1.75%. The tech-heavy Nasdaq advanced 1.63% as technology stocks extended their resurgence. International markets were also positive as the MSCI EAFE index finished up 0.06% while emerging market equities (MSCI EM) added 0.45%. Small company stocks, represented by the Russell 2000, surged 3.58%. Fixed income, represented by the Bloomberg Aggregate, lost 0.09% for the week as yields moved slightly higher. As a result, the 10 YR US Treasury closed at a yield of 4.35% (up ~ 6 bps from the previous week’s closing yield of ~4.29%). Gold prices closed at $3,331.60/oz – up 1.77% as the U.S. dollar weakened 0.22% on the week. Oil prices rose a bit to close at $67.00 per barrel, up 1.48% on the week.
Last week was a relatively quiet week for economic releases. The ISM Manufacturing Index improved to 49.0 in June, but it was the fourth consecutive month of contraction. The ISM Services Index jumped to 50.8 from May’s reading of 49.90 indicating growth in the services sector of the U.S. economy. Last Friday’s release of the June employment report showed headline payroll numbers expanding by 147,000, which was higher than expected. Government and health care hiring accounted for most of the gain. The unemployment rate held relatively stable at 4.1%.
The week ahead is pretty quiet on the economic front – June’s FOMC minutes and the NFIB small business index are the two big releases. The Fed minutes will reiterate the Fed’s ‘wait and see’ posture regarding tariffs and potential rate cuts as tariffs will likely have a one-time impact on prices. Closely watched will be news out of Washington regarding tariffs … we are hearing that the original July 9th deadline may be extended to August 1st. No doubt, markets will be choppy as tariffs announcements take place.
Stay diversified and stay invested.
We hope you had a great 4th! Enjoy the summer!