Domestic stocks only traded for 4 days last week, due to the Independence Day holiday. In that time, all 3 major domestic indexes posted positive results for the week. The S&P 500 added 1.52%, the Dow gained 0.76%, and the NASDAQ increased 2.37%. International stocks in the MSCI EAFE were up as well by 0.56%.
Once again, trade and tariffs were a major topic on many people’s minds. On Friday, July 6, the U.S. and China placed $34 billion of duties on each other’s imports. However, instead of focusing on the trade-war escalation, another topic captured many investors’ attention: the latest jobs report.
What did we learn about the labor market?
This month’s report about the employment situation provided several indications that the economy continues to be healthy and growing.
1. The economy added more jobs than expected.
Economists predicted approximately 195,000 new jobs in June. Instead, the report showed that the economy added 213,000 new positions. This positive performance indicates the labor market may be somewhat looser than people originally thought. As a result, the economy may have more ability to continue growing without inflation becoming a bigger concern.
2. More people tried to enter the labor market.
Unemployment rose from 3.8% to 4% in June. On the surface, this result may seem negative. In reality, the increase comes from people who were sitting on the sidelines deciding to look for work once again. This choice indicates they feel more confident in their potential to find jobs.
3. Wage growth continued at a moderate pace.
The latest data revealed wage growth at a 2.7% annual pace, which was slightly below projections. Economists aren’t certain why wages are growing at such a tepid rate, considering the labor market’s strength. However, with a record number of open jobs, wage growth should increase later this year. In addition, June’s pace should help calm concerns about the economy growing too quickly.
One detail that June’s employment report didn’t show was any meaningful, negative impacts from tariffs. If the trade disputes continue, however, industries such as manufacturing and construction could suffer. For now, the economy is starting the 3rd quarter on relatively strong footing—after a 2nd quarter that experts say could have experienced economic growth as high as 5%.
We will continue to monitor ongoing trade developments for any lasting effects on the economy or our clients’ financial lives. As always, if you have any questions, we’re here to talk.
Thursday: Consumer Price Index, Jobless Claims
Friday: Consumer Sentiment
Share the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues.
If you would like us to add them to our list,
simply click on the “Forward email” link below. We love being introduced!
If you would like to opt-out of future emails, please reply to this email with UNSUBSCRIBE in the subject line.
The content of this article is for informational purposes only and is not intended as an offer of investment advice, investment strategy or to buy, transfer or sell any security or other investment vehicle. Information contained herein has been obtained from sources deemed reliable but Spire Wealth Management LLC, Spire Securities LLC and their affiliates, including Compass Asset Management Group LLC, do not guarantee its accuracy. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions of Spire Wealth Management LLC, Spire Securities LLC or its affiliates.
Spire Wealth Management LLC is a federally Registered Investment Advisor. Securities offered through an affiliate, Spire Securities LLC. Member FINRA/SIPC
By accessing any links contained in this article you will be leaving Spire Wealth Management LLC & its affiliates and Compass Asset Management Group LLC websites and entering a website hosted by another party. Although Spire Wealth Management LLC & its affiliates and Compass Asset Management Group LLC have approved these as reliable partner sites, please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of Spire Wealth Management LLC & its affiliates Compass Asset Management Group LLC websites. The other parties are solely responsible for the content of their websites. We encourage you to read and evaluate the privacy and security policies on the sites you are entering, which may be different than those of Spire Wealth Management LLC & its affiliates Compass Asset Management Group LLC.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
By clicking on these links, you will leave our server, as the links are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site