Stocks Down Slightly in Choppy Week; Bonds Mixed
Good morning!
The Dow (-1.0%), NASDAQ (-0.1%), and S&P 500 (-0.3%) each fell for the week. Meanwhile, bonds were mixed, as taxable bonds fell 0.4% while tax-free municipal bonds gained 0.1%. The 10-year Treasury yield gained 0.07% to end the week at 4.35%.
Except for the weekly unemployment report, there was little economic data reported last week. As a result, the markets were choppy, responding to continued tariff discussions that heated up because of the “soft” July 9 deadline. That said, many of them were extended until August 1, but President Trump put additional tariff pressure on many key trading partners, including Canada, Mexico, and the European Union (EU). This pressure is in hope of developing deals with these different countries and region. In economic news, new unemployment claims fell last week, but continuing claims rose slightly over the prior week. These reports suggest that employers are not laying off workers but also aren’t hiring additional employees, either. This is likely a result of the uncertainty that continue to surround the tariffs.
This week will bring key inflation reports, such as the Consumer Price Index (CPI) and Producer Price Index (PPI), as well as retail sales, the latter of which demonstrates the health of the US consumer and economy. This also comes at the beginning of the quarterly corporate earnings season, which carries additional importance this time around. Last quarter, corporate leaders left us with vague predictions (if any at all) as to their expected profits in Q2 due to the pending tariffs. This time around, we will see how those corporations did, but it is widely expected that their predictions will be more refined this quarter. The reason is because the tariff uncertainty has waned a little, in that the expected range of tariffs (from high to low) is much more predictable now than it was in April. We encourage you to check out this week’s “Financial Planning: Explained” podcast / YouTube video, as Michael Menninger, CFP interviews Brad Sorenson, CFA, to discuss the economy, tariffs, and the bill that passed through Congress. This was a 2-part series that will be airing on Wednesday, July 16, and July 23.
Have a great day and terrific week!
Source: Yahoo Finance
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The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
