July 8, 2022

Weekly Market Commentary July 5th to July 8th 2022

Nonfarm Payrolls increased 372k in June, ahead of expectations. Unemployment in the U.S. remained at 3.6%. Labor Force Participation remained muted at 62.2%. Annualized wage growth was below the prior month, while modestly ahead of expectations at 5.1%. Earlier in the week, the JOLTS report showed a decrease in available jobs by 427k to 11.25mm.

Minutes of the Federal Open Market Committee June meeting struck a hawkish tone, as anticipated given the higher than anticipated rate hike announcement. The minutes noted the word “inflation” exactly 90 times without a single reference to recession. Noting that a “more restrictive” policy may be needed in the future summed up the tone of the dialogue.

Factory Orders reported for May were higher than anticipated at 1.6% and April figures were revised higher. Real growth in categories like metals and transportation equipment supported the increase, although higher prices (particularly for energy) were a key cause for the rise.

Equity markets advanced in the holiday-shortened trading week. The S&P 500 rose by 1.9% to 3,899. The NASDAQ Composite advance by a solid 4.6%. The yield on the 10-Year U.S. Treasury was modestly higher, closing the final session at 3.08%.

Key economic releases next week include Consumer Price Index (CPI) inflation, Retail Sales and Industrial Production.

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