In a holiday-shortened trading week, stocks rallied despite mixed economic data and vacillating energy prices and bond yields.
The Dow Jones Industrial Average increased 0.77%, while the Standard & Poor’s 500 rose 1.94%. The Nasdaq Composite index picked up 4.56% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, edged 0.46% higher.1,2,3
Stocks Move Higher
In advance of Friday’s much-anticipated employment report, stocks enjoyed successive daily gains despite ongoing concerns about a recession. Recession fears were supported by an inversion in the yield curve and updated second-quarter Gross Domestic Product projections indicating the economy is ready to contract.
Technology shares were the week’s big winners as investors appear to have turned to companies with earnings growth potential during a weakening economic environment. Stocks bounced along the flatline following the strong jobs report on Friday to close out a positive week.
Employment’s Mixed Signal
One of the holes in the "imminent-recession" narrative has been the labor market's strength. Historically, recessions have been preceded by or concurrently with a weakening jobs market.
Friday's employment report reflected a job market that continues to belie Wall Street's recession fears. Employers added 372,000 jobs in June, a number that was above economists' estimates of 250,000. Wage gains were robust (+5.1% year-over-year), though still below the inflation rate. The unemployment rate was unchanged at 3.6%.4
This Week: Key Economic Data
Wednesday: Consumer Price Index (CPI).
Thursday: Producer Price Index (PPI). Jobless Claims.
Friday: Retail Sales. Industrial Production. Consumer Sentiment.
Source: Econoday, July 8, 2022
This Week: Companies Reporting Earnings
Wednesday: Delta Air Lines, Inc. (DAL).
Thursday: JPMorgan Chase & Co. (JPM), Morgan Stanley (MS), Conagra Brands (CAG).
Friday: UnitedHealth Group (UNH), Citigroup, Inc. (C), Wells Fargo & Company (WFC), BlackRock, Inc. (BLK), U.S. Bancorp (USB), The PNC Financial Services Group, Inc. (PNC).
Source: Zacks, July 8, 2022
Footnotes and Sources
2. The Wall Street Journal, July 8, 2022
3. The Wall Street Journal, July 8, 2022
4. CNBC, July 8, 2022
5. IRS.gov, July 30, 2021
6. verywellmind.com, August 6, 2021
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Weekly Market Insights: Stocks Rally Despite Mixed Data
July 12, 2022|