MARKET RECAP

• Stocks ended the week on a high note but are down for the week. US stocks fell by 0.51%, and international stocks by 0.20%. However, the Dow Jones Industrial Average finished up 0.75%. The S&P Small Cap 600 was up by 3.6% for the week. Bonds rallied by 0.28%.
• Good inflation data helped small caps and the Dow. The personal consumption expenditures price index was up only 2.5%, and in the second quarter, GDP came in better than expected at 2.8%. To investors, this was the right mix to suggest a rate cut in September.
• The NASDAQ was down by 2.1% for the week. On Wednesday, the index fell by 3.6%, its worst day since 2022. At its low point on Thursday, the MAG 7 was off by 14% from its high on July 11th.
• On Thursday, copper ended its longest losing streak since February of 2020.

SCOREBOARD

MARKET RECAP

• US stocks decline by 1.66% and international stocks by 2.64%. US small caps increased by 1.7%. The NASDAQ was off by 3.65%.
• On Wednesday, the Nasdaq had its worst day in two years due to fears of tighter regulation on chip sales to Congress.
• Fears of a trade war weighed on the market as the week progressed, courtesy of the Trump/Vance platform.
• On Friday, a worldwide software failure impacted businesses almost everywhere due to one line of bad code written by Crowdstrike.

TRUMP

Trump had a chance to make a positive statement at the Republican National Convention. Just a few days after the assassination attempt, with most of the entire country ready to give him a chance, he could have made an honest attempt to broaden his coalition and act like he wanted to unite the country. But just like you would think, he opened up his speech with most of the right notes, but it quickly deteriorated into a rambling, hateful, attack-filled, dark diatribe about Democrats and the current state of the world and the country. Of which, of course, only he could solve, often in as little as a day or two, and simply with a phone call. Trump is crazy, and while the Republican convention-goers swallow it up hook, line, and sinker, most of the rest of the nation realizes he is as bad as ever.

He delivered the longest presidential nomination acceptance speech on record; almost all of it was rambling and off the cuff. Trump is mad at the world and paranoid, believing that he has magical powers to solve problems immediately and that only he can do this.

Even with that, he leads in the polls because Biden appeared frail and unable to continue as President. Today (Sunday), Biden announced that he will withdraw from the race, so the Dems have a chance to rally now and can win if they nominate the right person. Kamila Harris appears to be that nominee, and I would not consider her the right person.

Trump is a weak candidate. And I say this knowing full and well that the Republicans left the convention all fired up and confident in what was a high-energy and well-run event, sure that they will win in November.

But as described above, Trump is still Trump, and he is not mentally well, and the voters in the middle understand that, and they will tilt the election, one way or the other. The big problem with the Democrats is that their policies, which seem to be driven by the far left, are so bad and so harmful for America and its culture that a lot of the middle will lean towards Trump despite his meanness, craziness, and mental instability.

If only there were a reasonable centrist candidate. But at least for now, there isn’t so that Americans will be faced with two bad choices. Let’s hope.

SCOREBOARD

MARKET RECAP

Here are the highlights for the financial markets for the business week ending July 12, 2024:

-There was an attempted assassination of Donald Trump. Fortunately, the former President survived. Hopefully, some good comes out of this, and we can move forward as a more civil society and respect opinions even when they differ from our own. That is what each party is now pledging.

– The Dow closed above 40,000 for the second time, buoyed by gains in various sectors. The index hit intraday record highs on Friday.

– **Bank Earnings**:
– Wells Fargo’s shares dropped over 5% following their quarterly results, while JPMorgan Chase remained stable, and Citigroup advanced. Analysts expect major banks to increase reserves to cover declining loans, impacting their earnings.

– The June Consumer Price Index (CPI) fell by 0.1%, marking the first monthly decrease in over four years, reinforcing expectations of an interest rate cut by the Federal Reserve in September.
– The market is now pricing three rate cuts by the end of January 2025.

– Jobless claims for the week ending July 6 decreased to 222,000, indicating a stable job market.

Overall, the week was marked by gains in major indexes, a shift in investor focus from large-cap tech stocks to smaller companies, and significant movements in bank stocks following earnings reports. Inflation data and expectations of Federal Reserve rate cuts played a crucial role in shaping market sentiment.

SCOREBOARD

MARKET RECAP

The NASDAQ and S&P 500 hit new highs. The NASDAQ was up 3.5% for the week and the S&P was 2% higher.

Unemployment increased to 4.1% and the US added 206,000 new jobs, a solid number. But the increase in the unemployment rate follows a recent trend of a slow grind higher. It was 3.4% one year ago. New jobs for April and May were revised lower by 111,000. Average hourly earnings increased by 3.9%, the lowest increase since 2021.

Investors are operating under the assumption that this all  means a comfortable slowing of the economy, and not what might be a tougher recession. They are also taking it to mean that the first rate cut might happen sooner rather than later, maybe in September.

Keir Starmer, leader of the UK Labour Party, will take over leadership of the country. But this is not the Labour Party of old, Starmer has led the party more towards the center, he is more of a pragmatist than a populist. His five point plan is to reduce regulation to increase housing, lower immigration, build-out green energy, and improve the health system. He is pro-business.