Market Notebook

PRICE ACTION:
Equity prices, as measured by the ticker SPY, and bond prices, as measured by the ticker BND, both closed higher over the last week.

SPY +3.51%
BND +0.24%

TECHNICAL ANALYSIS:
SPY price broke out of consolidation higher indicating the possible start of an upward trend.

BND price appears to be in a downward trend.

SENTIMENT:
Positive sentiment carried the week after a roller coaster of a ride.

ECONOMY AND FUNDAMENTALS:
The week opened with a decisive upside surprise in the manufacturing sector and closed with a labor-market shock, presenting the most mixed macro signal of the summer.

The ISM Manufacturing PMI for July at 55.6 reinforced the case for durable industrial recovery but was quickly overshadowed by the week’s subsequent labor-market data.

Friday’s non farm payrolls contracted by 23,000 against consensus expectations near +80,000. Declines were concentrated in local government education and retail trade, with health care continuing to add positions. The unemployment rate held steady at 4.1%, and average hourly earnings were little changed on both a monthly and year-over-year basis, providing meaningful relief on the wage-inflation dimension. The combination of a payroll contraction with a stable unemployment rate and contained wages is unusual and likely reflects compositional and seasonal-adjustment dynamics rather than a broad-based deterioration.

All the best during the week ahead!

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.