Markets Modest Setback

What impact did the week have on the market?

• The Fed Debate:

The publication of minutes from the Federal Reserve's mid-June meeting on Wednesday reinforce predictions that interest rates will rise further this year.

According to the minutes, the majority of Fed officials projected more raises, and several non voting members preferred to keep raising rates at their June meeting rather than suspend the rate-hiking cycle.?

Source: CNN Business

• Minor Setback:

The major indexes failed to maintain the previous week’s positive momentum as the S&P 500 and the NASDAQ slipped around 1% and the Dow fell nearly 2%. Stocks declined on Thursday amid growing concerns about tightening monetary policy, and a brief rally that followed Friday’s jobs report reversed course in the afternoon.??

On the other hand, renewed worries about the outlook for more interest-rate increases sent yields of U.S. government bonds higher for the second week in a row. The yield of the 10-year Treasury bond climbed to 4.05%—the highest level in four months—and the 2-year note briefly eclipsed 5.00% on Thursday before setting below that threshold on Friday.

Source: The New York Times

• Jobs Slowdown:

After exceeding the consensus forecast of economists for 14 months in a row, the U.S. labor market fell modestly below expectations in June. Employers added 209,000 jobs—short of expectations for around 240,000—to record the smallest monthly gain since December 2020. The unemployment rate slipped to 3.6%.

Source: Seeking Alpha

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What to expect for the markets next week?

• Price Check Ahead: A Consumer Price Index report scheduled to be released on Wednesday will show whether the recent moderation in inflation extended into June. While inflation as measured by CPI rose at an annual 4.0% rate in May, core inflation was 5.3% excluding typically volatile costs such as energy and food.?

• More Earnings: Earnings season kicks off next week with reports from some of the world’s biggest banks and financial institutions, including JPMorgan Chase, Wells Fargo, Citigroup, and BlackRock. We can also expect results from PepsiCo, Delta Air Lines, and UnitedHealth Group, among others.