Most forecasters entered this year expecting a recession, but recently, economic growth has actually reaccelerated.In fact, the Atlanta Fed GDPNow model estimates that the U.S. economy will grow at a 5.8% saar this quarter.
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weekly_market_recap-08-21-2023
As of last Friday’s market close, the top 10 stocks in the S&P 500 accounted for 90% of the index’s year-to-date gains.While market breath has been narrow and returns have been highly concentrated, the rally has broadened out relative to May, when the S&P 500’s 10 largest names accounted for all of the year-to-date gains.… Read More
Last week’s employment report painted a nuanced picture of the labor market. While job openings and payroll gainscame in below expectations, wage growth surprised slightly to the upside. This prompts the question: Will wages revertto their previous easing trend? The answer may hinge on how corporations react to the evolving macroeconomicenvironment.… Read More
At their July meeting, the Fed hiked rates by 25bps, as widely expected, to a range of 5.25%-5.50% and deliveredsomewhat dovish messaging. While statement language kept the door open for further rate hikes, commentary fromChairman Powell emphasized continued data dependency in policy decisions.… Read More
In recent weeks, markets absorbed a lot of news pertaining to both sides of the Fed’s mandate, full employment andinflation. In June, payroll job growth declined, the unemployment rate ticked down from 3.7% to 3.6% and wagegrowth remained at 4.4% y/y, neither adding to, nor diminishing, fears of wage inflation.… Read More
June’s CPI report showed gathering disinflation with headline CPI rising 0.2% m/m and 3.1% y/y on a seasonallyadjusted basis, well below peak inflation of 8.9% y/y a year ago. This trend is not unique to the U.S.: the OECD reportedsoftening inflation in most major economies to 6.5% y/y in May, the lowest level for global inflation since December2021.… Read More
The U.S. economy has proven to be more resilient in 1H23 than many expected, as strength in the labor market hashelped support consumption. But how much momentum does that labor market have? This week’s chart looks toquantify labor market momentum in one number by analyzing seven key indicators: private payrolls, average hourlyearnings, the US Composite PMI Employment Index, the Conference Board Labor Differential Index, initial joblessclaims, job openings and the unemployment rate.… Read More
Stocks and bonds have had a strong start to the year due to resilient economic data, a bounce back in profit marginsand a moderation in the market’s expectations for interest rates. That being said, while stocks and bonds haveimproved from their lows of 2022, commodities finished 1H23 down due to cooling energy prices and weakeningglobal manufacturing demand.… Read More
Last week, investors parsed a slew of forward-looking data as they work to gauge the probability of a near-term recession. The Conference Board Leading Economic Index (LEI), a bellwether of economic health, took center stage, andrevealed a continued divergence between the economy and financial markets.… Read More
Last week, the Federal Reserve opted to keep the federal funds rate unchanged but hawkish messaging left the dooropen for further tightening in the coming months. In the Fed’s defense, economic growth has so far been resilient,suggesting the economy may be able to weather tighter conditions for longer.… Read More