Weekly Market Snapshot – July 8, 2019
Created by: Sam Tenney
Last week was a shortened market week with Independence Day. Hopefully you all enjoyed a wonderful week celebrating our freedoms and those who sacrifice(d) for us.
Only real economic news for the week was the new jobs report came out on Friday. Here are a few highlights.
- New Jobs created totaled 224,000 beating out predictions of 165,000 jobs for June. ¹
- In response the bonds market predictions of a 0.25% (25 basis points) Fed rate cut have dropped to 92.5% for July instead of 100%. ²
- This also largely eliminated a 0.50% (50 basis points) cut probability later this month.
- There is a large gap between US stocks prices compared to current economic data (as measured by the Macro surprise indicator) ¹. The stock market seems to be banking on bad economic data that will push the Fed to lower rates, which could push stock prices higher. At some point, bad economic data impacts risk assets like stocks, thus a rate cut may not make an immediate impact as fundamentals deteriorate, earnings fall, prices will too. ³
- One of the world’s largest banks is in trouble. Duestche Bank Germany outlines plan to reduce workforce, restructure debts and branches in order to try to turn profitable again. DBG is Germany’s largest bank.
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