Hello, I'm Greg Curvall, Senior Portfolio Manager with Fifth Third Bank.
U.S. equities were up for the holiday-shortened week, while Treasuries were weaker, with yields rising for three straight sessions through Friday. The dollar index was up 1.7 percent, recording its 11th rise of the past 14 weeks. Gold was down 3.3 percent, and WTI crude fell 3.4 percent.
The most important economic release of the week was June's nonfarm payrolls report, released Friday. This showed a headline gain of 372K jobs, notably stronger than the 275K consensus. The unemployment rate remained firm at 3.6 percent and Average Hourly Earnings showed a 0.3 percent increase in June. While the release seemed to undercut the impending recession narrative, it also was seen to bolster the case for a more-aggressive Fed.
In other US economic releases last week, June's ISM services report came in ahead of consensus, but still down month-over-month and printing at its lowest level since May 2020. New orders slipped and the employment component moved into contraction territory, with respondents placing most of the blame on supply chain issues.
Second-quarter earnings season is upon us, with many investors believing that earnings need to be revised considerably lower given lower growth, tightening financial conditions, and ongoing inflationary pressures. The season officially begins this week with some banks reporting on Thursday.
Elsewhere overseas, UK Prime Minister Boris Johnson announced he would step down in the wake of mass resignations by cabinet members. Japan is reeling from Friday's assassination of former Prime Minister Abe, who was his country's longest-serving prime minister.
This week's economic calendar will be highly anticipated as well. June Consumer Price Index, or CPI, will be released on Wednesday and most economists expect to see some moderation of pricing pressure. On Thursday, we get the Producer's Pricer's Index, which is expected to remain unchanged from May. We finish up the week with June retail sales and the University Of Michigan Sentiment index.
As always, we'll be watching and reporting back to you next week. Thank you.