Market developments
Equities:
Even with a short trading week, the U.S. stock market is approaching new all-time highs, with the S&P 500 on track for its 34th record this year. Traders are focusing on potential Federal Reserve rate cuts despite signs of economic slowdowns. Overall, the market is navigating a complex landscape of economic data, policy expectations, and seasonal trends, with investors closely watching for signs that could prompt Fed action.
Fixed income:
June’s jobs report showed nonfarm payrolls rising by 206,000, exceeding forecasts. However, the unemployment rate increased to 4.1%, and average hourly earnings cooled. Yields dropped as we closed out the week as this data has strengthened expectations for Fed rate cuts, with some analysts eyeing a potential September reduction.
Commodities:
Despite the decline on Friday, oil prices have risen 13% over the past month. This increase is attributed to rising demand during the summer driving season, falling U.S. oil inventories, and restricted supply due to OPEC+ maintaining voluntary supply cuts of 2.2 million barrels per day through the end of September.