The stock market this summer has had a nice Summer Breeze (“and it makes me feel fine”). Though the winning streak for daily consecutive gains in the grandaddy of TV benchmarks, the Dow Jones Industrial Average was finally snapped last week at 13 (which was its longest winning streak since 1987 and almost since the late 1800s), the weekly winning streak for the Dow (and S&P 500) has now hit three consecutive weeks. Both have hit new 52-week highs. Going into the last day of July, it looks like the S&P will have its fifth consecutive monthly gain. It’s best monthly streak in two years.
It was another solid week for the markets, with all the major equity indices in the table on this page higher, except for the overall bond market. As for bonds, the 10-year Treasury yield did gain 13 bpts last week to finish just below 4%. While this yield is still below recent highs and the highs from last fall on the daily charts, on a monthly closing basis, depending on what happens on the last day of July, it could have its highest monthly closing yield since 2008. Could this breeze be the sign of something more ominous for the stock market though?
One key report last week was last Friday’s personal consumption expenditures (PCE) index. In short, it continues to show slowing inflation and was even lower than anticipated. Will that be enough to stop the Fed? It might be. The CME FedWatch Tool - CME Group is now currently pricing an 80% chance that the Fed pauses at their next meeting on September 20th at the current Fed Funds rate range of 5.25-5.50%. Another good report last week was the Q223 GDP report on GDP. It also came in slightly better than expected. The GDPNow- Federal Reserve Bank of Atlanta is even now estimating a 3.5% GDP growth for the 3Q23. Never mind the earlier fears of a hard recession, or even a soft landing, could the economy reach a Goldilocks state where economic growth is solid, and inflation is tamed? Given recent data, it’s a fair question.
As for this coming week, in addition to more earnings reports (particularly from Big Tech), the monthly jobs report is released this Friday. The current consensus expectation is for 200k more jobs being created and an unemployment rate of 3.6%.
Stay invested. Stay diversified. Stay disciplined.
2083-OPS-7/31/2023
The views expressed herein are exclusively those of Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor, and are not meant as investment advice and are subject to change.
The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org.
The CMT Program demonstrates mastery of a core body of knowledge of investment risk in portfolio management. The Chartered Market Technician® (CMT) designation marks the highest education within the discipline and is the preeminent designation for practitioners of technical analysis worldwide. To learn more about the CMT, visit https://cmtassociation.org/.
Think2perform’s Behavioral Financial Advice program integrates traditional finance practices with psychology and neuroscience to improve emotional competency and decision-making behavior that increases effective usage of the financial plan with clients. To obtain the Behavioral Financial Advisor (BFA) designation, participants must complete a self-directed course, which takes 20-30 hours to complete, and includes a mix of interactive exercises, videos and case studies. To learn more about the BFA, visit https://www.think2perform.com.
Wealth Management services offered through Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor.