Economic Data and Market Highlights
The S&P 500 surged to new highs this past week, advancing 3.45% as Mideast tensions eased. Mega cap stocks led the way, but the banking sector jumped 3.22% as big banks passed the Federal Reserve’s stress test. Fund flow data backs the rise, as we’ve seen significant inflows into large cap ETFs in recent days:
On the trade front, the Trump administration noted that progress had been made with China and the UK, but Friday announced it had ceased negotiations with Canada and will impose new tariffs. The riff comes largely due to an imposed digital services tax of 3% on companies such as Google, Apple, and Amazon, imposed last year but with tax revenue beginning to flow north on Monday.
Powell testified before Congress on Wednesday and Thursday, staying largely on message. Inflation has risen slightly since February to 2.18% and Powell maintains the Fed needs to monitor the progress of tariff-related inflation that may show up in data in the coming weeks. The Fed has telegraphed that it will likely cut before the year-end, possibly twice. As the June Fed meeting left rates unchanged, the Trump administration has started to turn its attention to a possible replacement for Powell. While Powell can’t be fired, a replacement can be named in advance.
The Past Week’s Notable US data points (with revisions)
The Upcoming Week’s notable US data points
Source: Morningstar
Data Source: Financial News London, Financial Times, Morningstar, MarketWatch, Standard & Poor’s, and the Wall Street Journal.
Authors:
Jon Chesshire
Michael McNamara