This is a new installment in an ongoing series where Marc Bautis and colleagues comment on hot topics in the financial industry. This week, Kayla Waller, Financial Planner, fills us in.
July 2023 Market Summary
Stocks continued their steady climb higher in July as the NASDAQ rose 4.1%, the Dow Jones Industrial Average grew 3.4%, and the S&P 500 rose 3.2%. The NASDAQ is up 37.7% on the year, the S&P 500 20.7%, and the Dow 8.6%. Emerging Markets was the top performer in July at 6.3%, and the Russell 2000 Small Caps index was right behind at 6.1%.
All 11 US stock sectors posted positive returns for the second consecutive month. A double-digit percentage increase in oil prices in July sent the energy sector 7.8% higher, followed by communication services at 5.7% and financials at 4.8%.
Inflation came in below 3% for the first time in over two years, while July’s Core Inflation reading was below 5% for the first time since November 2021.
Additionally, the Federal Reserve resumed hiking the Target Federal Funds Rate at its July 26th meeting, raising the benchmark interest rate by 25 basis points to 5.50%. This marked the 11th rate hike in the last 12 Fed meetings.
New and Existing Home Sales both fell in July, but Existing Home Prices went in the opposite direction. Brent and WTI crude oil both jumped over 10% higher MoM in July, forcing retail gas prices higher as well.
In a stark contrast to last month, short- and long-term US treasury yields shot higher in July while the middle of the yield spectrum was largely unchanged.
The 1-Month and 3-Month Treasury Bills increased by 0.24% and 0.12%, respectively. The 10-Year and 20-Year both rose by 0.16%, while the 30-Year notched 0.17% higher. 2-Year, 3-Year, and 5-Year notes rose by no more than 0.05% each, while the 1-Year fell by 0.03%.
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