07/25/22 Wealth Management Insights
The major U.S. stock indexes rebounded from the previous week’s modest declines to post gains of around 2.0% to 3.0%. Although stocks have recently traded in a fairly narrow range, the S&P 500 was up 8.0% on Friday from a recent low in mid-June.
Labor Market Setback
The number of Americans submitting initial claims for unemployment benefits climbed to 251,000, rising for the third week in a row to the highest level in eight months. This closely watched job market health indicator signals a slowing U.S. economy.
With the earnings season now more than 20% completed, the proportion of S&P 500 companies that are beating analysts’ earnings expectations is smaller than usual. About 68% had exceeded net income expectations as of Friday, trailing the five year average of 77%, according to FactSet.
The U.S. Federal Reserve is widely expected to approve another big interest-rate increase at Wednesday’s U.S. policy meeting. In June, the Fed lifted its short-term target range by three-quarters of a percentage point- the biggest hike since 1994-and a similar steep increase is expected heading into this week’s meeting, with some economists expecting rates will go up a full percentage point.
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