Rising concerns about further rate hikes sent stocks lower to kick off the second half of trading.
The Dow Jones Industrial Average lost 1.96%, while the Standard & Poor’s 500 retreated 1.16%. The Nasdaq Composite index surrendered 0.92% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, tumbled 2.57%.1,2,3
Stocks were dragged lower last week by news reigniting fears of additional interest rate increases. It started with the minutes from June’s Federal Open Market Committee meeting, which revealed a majority of voting members supported at least two more rate hikes. But a strong employment report from Automated Data Processing (ADP), a payroll processor, unnerved investors, sending stocks lower and bond yields higher.
Markets stabilized after Friday morning’s federal government’s monthly employment release showed a less-than-expected increase in nonfarm payrolls. But stock prices turned down in the afternoon, adding to the week’s losses.
Mixed Labor Market Signals
Wall Street was rattled by an unexpected surge in new private-sector jobs last Thursday. ADP reported private sector employers had added 497,000 jobs in June, blowing away the consensus estimate of 220,000. Leisure and hospitality led the gains with 232,000 new hires, followed by construction (97,000).4
Friday’s release of monthly employment data painted a more moderate picture, with 209,000 new jobs added in June, well below the estimate of 240,000 and May’s downwardly revised total of 306,000. Friday’s report added to data released earlier in the week (a decline in job openings and a rise in jobless claims) that suggested that the labor market may be cooling.5
This Week: Key Economic Data
Wednesday: Consumer Price Index (CPI).
Thursday: Producer Price Index (PPI). Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, July 7, 2023
This Week: Companies Reporting Earnings
Thursday: Delta Air Lines, Inc. (DAL), Pepsico, Inc. (PEP), Cintas Corporation (CTAS).
Friday: JPMorgan Chase & Co. (JPM), UnitedHealth Group Incorporated (UNH), Citigroup, Inc. (C), Wells Fargo & Company (WFC), BlackRock, Inc. (BLK).
Source: Zacks, July 7, 2023
"Self-pity in its early stages is as snug as a feather mattress. Only when it hardens does it become uncomfortable."
– Maya Angelou
IRS Program Helps Seniors Prepare Taxes
The Internal Revenue Service (IRS) has a tool called Free File, which offers online tax preparation, direct deposit of refunds, and electronic filing choices. This tool can be helpful for taxpayers on a fixed budget, including seniors and retirees. Here are some things to know about the tool:
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov6
Footnotes and Sources
2. The Wall Street Journal, July 7, 2023.
3. The Wall Street Journal, July 7, 2023.
4. CNBC, July 6, 2023.
5. CNBC, July 7, 2023.
6. IRS.gov, January 23, 2023
7. Medical News Today, February 15, 2023
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