“Perseverance is not a long race; it is many short races, one after the other.”
-Walter Elliot
Here’s what you need to know this week:
· Stocks once again climb to new highs
· Tariff negotiations, corporate earnings, and economic reports combine for an unusually busy week
The Streak Continues
Markets continued their winning streak last week with both the S&P 500 and NASDAQ notching new all-time highs. The Dow Jones also gained and is within 1% of its own new high. These gains were driven by a combination of strong corporate earnings and optimism surrounding tariff negotiations.
As of writing, 34% of S&P 500 component companies have reported 2nd quarter earnings and 80% of those companies have beaten Wall Street estimates, which is higher than the historical average of 78%[1]. More than one-third of the S&P 500 will report throughout this week and should give us a clearer picture on the current state of business productivity.
Then of course there are the tariff negotiations. US negotiators agreed to a 15% tariff rate on most imports from the European Union as well as a purchase of $750 billion of American energy over the next three years[2]. Treasury Secretary Scott Bessent announced another ninety-day extension on the US-China tariff pause as negotiations continue[3]; Commerce Secretary Howard Lutnick announced that there will be no more extensions with any other countries and expects to see the remaining negotiations wrapped up by Friday[4].
Busy Week
On top of potential tariff news, the back half of this week holds a slew of important economic data. First up is the Federal Reserve meeting to determine interest rate policy and investors overwhelmingly expect the Fed to hold rates steady; as of writing, the bond market is only assigning a 2.1% chance of a rate cut[5].
Then on Thursday we will receive the Personal Consumption Expenditures (PCE) report for the month of June. This report is the Federal Reserve’s preferred measure of inflation and should give us clues as to the Federal Reserve’s next interest rate decision in September. Then we will receive the nonfarm payrolls (NFP) report for June on Friday, and this report measures the state of the job market in the US. The Federal Reserve’s dual mandate impels them to maintain reasonable levels of both inflation and unemployment, so this week will provide critical data on both fronts. These reports, combined with corporate earnings and the tariff deadline, create a strong mix for potential market moves in the back half of the week.
What Else
· Smoke from large Canadian wildfires is covering the skies over multiple northeastern states
· Israel has agreed to allow food and aid shipments into Gaza after international condemnation
· Skirmishes continue along the Thailand-Cambodia border despite a ceasefire
· The baseball Hall of Fame inducted five new members including Ichiro Suzuki and Billy Wagner
· Rock legend Ozzy Osbourne passed away at the age of 76; wrestling legend Hulk Hogan passed away at the age of 71
What We’re Reading
Here in Oklahoma we are very familiar with storm chasers; in fact, I bet some of you reading this have been on a storm chase yourself. Now for the first time, the federal government is sponsoring a new type of storm chaser: hail chasers. Click below to read about these chasers’ mission and see some incredible storm photos from the Great Plains:
· https://www.nbcnews.com/science/climate-change/hail-chasers-rcna219122
What’s Happening Downtown
The Lyric Theatre of Oklahoma is putting on a live production of Oklahoma! at the Civic Center Music Hall. There are performances every day this week and two performances on Saturday, click below to learn more:
· https://www.okcciviccenter.com/events/detail/oklahoma?mc_cid=610e0f5f98&mc_eid=71bf387036
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Jenni Hess
Sources: [1] FactSet [2] NYT [3] Reuters [4] CNBC [5] CME Group