Market Review & Preview – Monday Morning Market Memo – July 1, 2024

Market Review & Preview – Monday Morning Market Memo – July 1, 2024

The major stock market averages finished little changed last week.  Both the Dow Jones Industrial Average and the Standard & Poor’s 500 Index edged .1% lower to 39,118.86 and 5,460.48, respectively.  The tech-heavy NASDAQ Composite rose .24% to 17,732.60.  Part of the reason the stock market finished the week essentially where it started, is because there were no surprises on the inflation front.

The Personal Consumption Expenditures report (PCE), which is the Federal Reserve’s preferred reading on inflation came in as expected.  Both headline PCE and core PCE (which excludes food and energy) were up 2.6% on an annual basis, exactly in line with market expectations.  Inflation numbers are of utmost importance in determining if and when the Federal Reserve will cut interest rates, so no surprises here last week resulted in little overall stock market movement.

What did move significantly last week, and in opposite directions, were shares of a couple notable companies and household names after they reported earnings.  FedEx delivered better-than-expected quarterly earnings and revenues, driving their stock over 15% higher.  Nike, on the other hand, didn’t do it for investors, as their shares dropped 20% after the company cut its quarterly sales forecast and full-year guidance.  Consider these reports a warm us as we get ready for earnings season, which begins in a couple of weeks!

Looking to the week ahead, the Federal Open Market Committee releases the minutes from their monetary policy meeting held last month.  Investors will be looking for indications on the timing and likelihood of interest rate cuts.  According to CME FedWatch, there is a 63.5% probability the Fed will lower rates at their September meeting.  The other major factor in determining monetary policy, along with inflation, is the employment picture, and this week will bring one of the most important economic data points of them all – the Jobs Report.

The U.S. Bureau of Labor Statistics is scheduled to release the June Jobs Report on Friday morning.  Expectations are the economy added 195,000 jobs and for the unemployment rate to come in unchanged at 4.%.  Any surprise with this number always has the potential to move the market.

As always, don’t hesitate to contact us with any questions or if you would like to schedule a meeting.

The financial markets are closed on Thursday July 4th, in observance of Independence Day.  We hope you enjoy the holiday!

All the best – Southport Station Financial Management, LLC