Introduction
Introducing the “Weekly Market Roundup” – your weekly market brief. This report is easy-to-digest and reviews important developments of the prior week, what to watch for in the week ahead and cross-asset market performance.
We appreciate any feedback regarding this new product, so please leave any recommendations in the comment section below. We will also be sending out this report via email format for easier reading access. Thank you.
Key Developments
- The S&P 500 rose 0.7% last week as Q2 earnings season rolls on. Energy and Health Care sectors led as they gained 3.5%, while Consumer Discretionary (-2.3%) and Communication Services (-3.0%) lagged.
- Lackluster earnings releases from TSLA and NFLX were the main catalyst for those sectors to see outsized weakness.
- Economic data in the US was mixed, with retail sales below expectations while weekly initial jobless claims reported below consensus and the prior week’s reading.
- Value sector strength last week and in prior weeks in areas such as Health Care, Energy and Financials has helped the Russell 1000 Value Index reach a 15-month high.
- The US Dollar Index (DXY) rose 1.2%, the best weekly return since May. The VIX was steady around 14, but 30-day S&P 500 realized volatility fell to single digits (9.7%) for the first time since November 2021.
- Market participants will gear up for the biggest week of earnings reports for the Q2 season (235 S&P 500 companies) in addition to a slew of economic data and the July FOMC meeting Wednesday. Markets are pricing in a 96% chance of a 25 basis-point hike.
This Week’s Economic Data
Chart of the Week
Leading Economic Indicator Index (LEI) Contracts for 12th Consecutive Month, Characteristic of a Recessionary Environment
- The Conference Board’s Leading Economic Indicator Index (LEI), which measures changes in 10 different leading indicators, fell by 7.8% in June. This was the 12th straight month of a negative YoY reading.
- The persistence of negative readings is a warning signal, as leading indicators are typically used to establish cyclical turning points in the economy and business cycle.
- In fact, since 1960, the LEI has never been negative this long without the economy already being in recession.
Global Cross-Asset Performance Summary
Weekly
Year to Date
S&P 500 Sector Performance
Weekly
Year to Date
Very nice.
Good job
Excellent summary. Great contextual information (disappointed I didn’t get in on Japan). Perhaps you could add a commentary on how any of this changes your perspective on any element of the current model portfolio or open swing trades.
PE Ratio changes w/w would be helpful
Hi William – Thanks for your comment. We considered having valuations as a part of this weekly update, but ultimately decided to leave it out for now given valuation changes on a W/W basis tend to be very small across sectors and equity markets. It is something we would consider adding, but that would most likely be as an addition on a monthly basis, not every week. I hope that helps. Thank you
Thanks guys. That LEI chart is telling.
Excellent weekly wrap, being aware of economic report releases is key to not being whip sawed 👍