Markets Consolidate

Indices

• Dow 44,371, -367 or -0.82%.
• Nasdaq 20,585, +78 or +0.38%.
• S&P 6,259, +0or +0.01%.
• MSCI EAFE 2648.39, -9.61 or-0.36%.
• USD10Y4.423%, +5.9bp or +1.35%.
• WTI Crude $68.45/bbl, +$0.83 or+1.23%.

Markets Consolidate

It was a relatively slow week post the Independence Day holiday weekend. The Federal Reserve released their June meeting minutes, which revealed little insight into when or how much the central bank may cut rates. As reported here after the meeting, the Fed dot plot chart is almost equally split between those that believe that two cuts are warranted this year and those that believe there will be fewer (10-9 respectively). Meanwhile, the CME FedWatch tool is predicting only a 5.2% chance of a 25 bp cut by the Fed at their meeting later this month, but a 60.4% chance of at least a 25bp cut when they meet in September. Of course, that could all change with the release of the June CPI and PPI data this coming week. If Core CPI jumps more than the consensus estimates of +0.3% month over month (vs +0.1% last month), the narrative on rate cuts could change dramatically.

The Upcoming Week: July14 – July 19

The banks kick off the Q2 earnings season on Tuesday. JB Hunt (JBHT), United Airlines (UAL) and Pepsi (PEP) will give some insight as to the health of the economy and the American consumer. Finally, tech/media giant Netflix (NFLX) will report on Thursday.

Not to be outdone, the economic calendar includes retail and wholesale inflation data in the form of the June Consumer Price and Producer Price reports which will be published on Tuesday and Wednesday, respectively.

Economic Calendar