Take a look at last week’s market recap from Joe Gallemore, CIMA® Partner & Director of Investment Management for Argent Bridge Advisors. Watch the video now!
Last week we finally got the news that was widely expected: Headline inflation declined in the month of July. While this decline was modest, mostly driven by a drop in oil/gas prices, it was a welcome development for stock markets.
1H of the year was bad, with the S&P 500 -20%. But history suggests that the 2H could likely be good. In the last 90 years, in the 5 instances where the Jan – June return was -15% or greater, the Jul-Dec return was positive every time.
And now 6 weeks into 2H, it seems the market certainly wants it to be. The S&P 500 powered back 9.2% in July and another 4.3% so far in August.
- Bonds have also clawed back some return since the start of July. The US Agg gained +1.6%, while some bond sub-sectors such as US Corporates and Munis rallying almost +3%.
Still, a lot of work to be done, and it all depends on the data that rolls out bit by bit. But for now, we’ve seen gas prices decline for almost 60 straight days (the national average price for a gallon of gas has come down almost a full $1), the most recent jobs report surprisingly showed more hiring than expected, consumer spending numbers have remained resilient, and this has led to some better-than-expected earnings reports for a lot of consumer dependent companies, such as Walmart.
Will remain to be seen when things are fully turned around economically, inflation-wise, and with regards to the stock market. For now, the American consumer and investor sentiment are willing things upward.