Equities Make Strong Move Higher

By Scott Poore, AIF, AWMA, APMA
Chief Investment Officer, Eudaimonia Group

It was a strong week for equities last week.  Overall, equities saw gains of 2% or more over the last 5 days.  With 2nd quarter earnings basically concluded, 79% of S&P 500 companies reported earnings that exceeded estimates.  That above the 5-year average of 77%.  In addition, 45% of S&P companies provided positive guidance for Q3 earnings, which is the highest number since the third quarter of 2021.  There was a lot of economic data to digest last week, which reached a crescendo with the Jobs Report on Friday.

While the payroll numbers exceeded expectations (+187,000 vs. +170,000), the Unemployment Rate moved higher to 3.8%, which is the highest level in over a year.  The market reacted to this news with a jump in the odds for no rate hike later this month, as a softening labor market should keep the Fed at bay.  Prior to the jobs report, the Fed Futures showed an 83% probability of no rate hike.  After the report, the probability moved to 93% for no rate hike.  In addition, odds for no hike in November moved to 60% after previously reading a 50:50 probability.  The U.S. consumer stayed on track as Redbook Sales and Personal Spending both came in higher than the previous reading.  The Fed’s preferred measure of inflation, the PCE Price Index, showed little change.  There are multiple Fed speakers this week, which could make trading in markets a little choppy.  It is worth noting that the VIX index, which measures volatility, is at 3-year lows.  We’ll see where we go from here.

___________________________________________________________________________________________________________

Disclosures

The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.

Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. 

Past Performance does not guarantee future results.