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Weekly Market Update 7/2/2021

By July 8, 2021 No Comments

Stocks tacked on a second consecutive week of gains with the S&P 500 rising over 1.5% as fears around potential monetary policy shifts continued to recede, and stocks have enjoyed seven straight days of higher market closes.  However, the recent breakout higher has been rather tame as Friday’s 0.7% rise in the S&P 500 was the largest move during this recent streak, as investors cheered a jobs report for June that was the epitome of “goldilocks” (not too hot, not too cold).  For example, after back-to-back disappointing employment reports, June nonfarm payrolls grew 850K, the highest in ten months, and handedly beat consensus estimates of 700K.  However, the labor market remains 6.7M jobs below pre-pandemic levels and the unemployment rate missed expectations, rising from 5.8% to 5.9%.  Furthermore, average hourly earnings of 0.3% came in below the 0.4% consensus estimate, so concerns of accelerating inflation were calmed, and investors enter the holiday weekend celebrating new all-time highs for the Dow Jones Industrial Average, the Nasdaq and the S&P 500.

Travel Rebound

Coinciding with the breakout in stocks, Americans are increasingly venturing out and travel for the July 4th weekend is expected to approach levels not seen since 2019.  AAA expects 47 million people to travel from July 1st through the 5th and one of the strongest areas, car rentals, is expected to see bookings jump 262% from 2020 and 85% of 2019 levels (per TripIt).  Interest in flying is also up considerably, with the Federal Aviation Administration indicating June 24 saw the most US air traffic since before the pandemic, while the holiday weekend is expected to surpass those levels.  Unfortunately, prices have also surged, and daily car rental rates are up 140% from 2019 while national gas prices are over $3 a gallon on average, per AAA.  Areas such as lodging still have a fair amount of room to improve, at 64% of their 2019 levels, but clearly more normal levels of consumer behavior are emerging.  On behalf of the entire Peddock Team, we would like to wish everyone a safe and wonderful July 4th Holiday weekend!

In observance of the July 4th holiday, our office will be closed Monday, July 5, 2021

Regards,

Ian G. Browning, CFA | Director, Investment Strategies & Shareholder
Peter E. Simmons, JD | President & CEO

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