WEEKLY MARKET UPDATE 8/02/2024

In simple terms, the market threw a tantrum into the end of the week as the Fed’s decision not to cut interest rates was followed by surprisingly weak economic data. Most notably, Friday’s employment report for July saw the unemployment rise to 4.3%, from 4.1% the month prior, and job growth continued to slow.  As a result, the S&P 500 fell by about 2% on the week and interest rates fell sharply as concerns have grown that the Federal Reserve will commit another policy mistake, this time not cutting rates soon enough, and jeopardize the soft economic landing narrative.  Rising tensions in the Middle East are also probably adding to market volatility.  Nonetheless, the Q2 earnings season is 75% over and on pace for 11.9% year-over-year earnings growth, well above expectations for 8.9% (per FactSet).  Next week we expect more market volatility as investors continue to price-in interest rate cut expectations for the Fed’s next meeting in September. 

Ian G. Browning, CFA
Managing Director, Investment Strategies | Shareholder

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