By: Gerald Sparrow, President & Founder, Sparrow Capital Management, Inc.
In the financial world, in my opinion, some weeks are more important than others, and we just lived through a big one. Let’s unpack each of the four key stats:
The Fed. As expected, the Fed bumped up short-term rates again at its July meeting. But the markets breathed a sigh of relief in reaction. Investors believe the Fed is getting a handle on inflation, which may mean slower rate increases.
Inflation. It feels like inflation is trending lower – check out gasoline prices. But the Fed’s key inflation indicator, the personal consumption expenditures index, remained stubbornly high in June. Result? We’re still getting mixed signals.
GDP. The latest report showed a second straight quarterly contraction. Two quarters of negative growth would have been a recession by definition not long ago. Economists now look at more factors, such as jobs and hiring, before labeling an economy.
Company reports. They have been fantastic, with many companies checking in with better-than-expected results. In its July 29 update, FactSet reported that 73% of S&P 500 companies were surprised with earnings, and 66% were astonished by sales.
Enjoy the final weeks of summer. We’ll keep an eye on the markets.
PHOTO CREDIT: https://www.shutterstock.com/g/haveseen via Shutterstock
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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.
