Market Recap Week of 7/04/2022 Through 7/08/2022 – Daily Flash Briefing

The S&P 500 index rose 1.9% last week, led by the communication services and consumer discretionary sectors as investors saw buying opportunities following a 21% drop in the first half of the year.

The week’s climb came as the S&P 500 rose four sessions in a row through Thursday’s close, marking its longest daily winning streak since March. It came close to extending the winning streak to a fifth day on Friday, but ended Friday’s session just barely in the red with a 0.1% decline.

The weekly gain also came despite mixed economic readings and expectations.

Federal Reserve Bank of St. Louis President James Bullard, a voting member of the Federal Reserve’s Federal Open Market Committee, on Thursday said “it would make a lot of sense” for the policy-setting committee to raise its key interest rate target by 75 basis points at its meeting later this month. Such a move would mark the second month in a row of an increase that large. While the rate increases are intended to tame inflation and thus help the economy, investors have been fearful a recession could be looming.

Still, Bullard gave upbeat comments on the economic outlook. He described the labor market as robust and said output is expected to continue to expand through 2022.

Friday, the Labor Department reported US jobs rose by more than expected in June while the unemployment rate remained unchanged for the fourth month in a row. Nonfarm employment increased by 372,000 jobs last month following a downwardly revised gain of 384,000 in May, the Bureau of Labor Statistics said Friday. The consensus on Econoday was for a 270,000 rise. The unemployment rate remained unchanged at 3.6%, matching the Street’s view.

The communication services sector had the largest percentage gain last week, climbing 4.9%, followed by a 4.6% rise in consumer discretionary and a 4.3% increase in technology. Other gainers included the health care sector and financials.

On the downside, the utilities sector fell 2.9%, followed by a 2.4% drop in energy. Other decliners included materials, real estate, consumer staples and industrials.

This week, the Q2 earnings reporting season will kick off with reports from companies including Delta Air Lines (DAL), JPMorgan Chase (JPM), Morgan Stanley (MS), UnitedHealth Group (UNH), Wells Fargo (WFC) and Citigroup (C).

Economic data expected next week include the June consumer price index on Wednesday, the June producer price index on Thursday and June retail sales on Friday.

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