The Major Markets all closed higher last week, although with a somewhat muted performance. The Nasdaq was the weakest of the bunch as other segments of the market managed to have their day in the sun. Nevertheless, the Nasdaq and the S&P 500 both managed to set fresh all-time highs. 

At the Sector level, Real estate and Utilities were the dominate performers while Communication Services dropped. The fall in Communication Services was in large part due to pullbacks in both Meta and Netflix, which carry significant weight within the 22-constituent segment. 

Last Week’s Economic Calendar was marked with a number of high-profile events. Mid-week, Fed Chairman Jerome Powell testified to Congress. However, nothing new was shared in his testimony beyond his reaffirmation to wait for more data to provide an indication of when to take the next steps with the rate policy, which would likely be to cut rates. 

The next day, the most notable headline was released in the form of the June Consumer Price Index Report released. This report saw a slight dip of -0.1%, falling below estimates of a 0.1% increase. Core CPI, which excludes Food and Energy, also came in below expectations. 

Friday saw the release of the Producer Price Index which came mostly in line with the CPI results. Although the Headline reading of the PPI did see a 0.2% increase month over month, the Core PPI number was below estimates, providing what some viewed as a goldilocks result; not-too-hot, not-too-cold. 

Together, these headlines favored the idea of rate cuts sometime soon. The CMEGroup’s Fedwatch Tool saw the probabilities shift to show an 87.1% probability of a 25-basis point cut to the Fed Funds Rate at the September meeting with another high possibility of an additional cut at the November or December meetings. 

Treasuries responded in kind to the news with the overall yield curve dropping by as much as 17 basis points last week. 

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Concerned about inflation? Check out our Tips to Reduce Risks In Case of Recession.

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The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries. https://us.spindices.com/indices/equity/sp-500 The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. https://us.spindices.com/indices/equity/dow-jones-industrial-average The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes. https://indexes.nasdaqomx.com/Index/Overview/COMP The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets. The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017, it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country. https://www.msci.com/ The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market. https://us.spindices.com/indices Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®). https://us.spindices.com/indices