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July Market Update


Market Indices Performance

June Market Indices Performance


July Recap

The S&P 500 rose 1.1% in July. Inflation, measured by the Consumer Price Index (CPI), rose 2.9% from last year, the first reading below 3% since March of 2021.1 The economy added 114k jobs in July, the unemployment rate rose to 4.3%, and average hourly earnings were up 3.6% year-over-year.2 This data all pointed to a slowing labor market, which spooked investors and led to a brief sell-off. After June saw large-cap indices like the S&P 500 and the Nasdaq outperform while hitting multiple all-time highs, small caps captured the show in July. The Russell 2000 rose over 10% as Wall Street started to price in more rate cuts than previously anticipated, which led to falling yields and rising bond prices. In mid-July, President Biden officially dropped out of the 2024 presidential race; Trump vs. Harris will now likely be a tighter race and potentially lead to more market volatility as the election nears.



The Present

A very positive Q2 earnings season is wrapping up; earnings for the S&P 500 grew at 10.9%, following 6% growth in Q1. Much of the earnings growth in the past quarters has come from large growth stocks like those in the ‘Magnificent 7’, 3 but different sectors and classes are expected to contribute more as the year progresses.4 Interest rates and all factors that influence them, most importantly inflation and the labor market, remain very important to the market. The 10yr treasury ended July around 4.1% but has stayed below 4% in August after several volatile moves in response to different economic data.5 Mortgage rates have fallen to around 6.5%.6



The Future

The market is now predicting 3-4 interest rate cuts for 2024, beginning in September. 7 Federal Reserve chairman Powell’s comments at the annual Jackson Hole symposium in late August will give a better idea of what to expect from the Fed regarding interest rates. August has historically been a mediocre month for the market.8 S&P 500 earnings are expected to grow by 11% for 2024, while the Fed sees inflation (PCE) dropping to 2.8% and unemployment at 4.0% by the end of the year (both of these levels have been reached already).9,10 While the economy remains relatively strong for now, some predict that GDP will turn negative by the fourth quarter of 2024, possibly leading to recession.



Synthetic Benchmark Performance

June Synthetic Benchmark Performance




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The views expressed are those of the author as of the date noted, are subject to change based on market and other various conditions. This presentation is not an offer or a solicitation to buy or sell securities. The material discussed is meant to provide general education information only and it is not to be construed as specific investment, tax or legal advice and does not give investment recommendations.


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3. The Magnificent 7 consists of Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, NVIDIA, and Tesla


** Synthetic Benchmark Equity Allocations are divided as follows:

Synthetic Benchmark Equity Allocations

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