Weekly Market Commentary – 7/2/2021

-Darren Leavitt, CFA

Economic data for the week was headlined by the Employment Situation Report that resulted in mixed results. The S&P 500, the Dow, and the NASDAQ forged another set of all-time highs while the Russell 2000 lagged on a quarter-end rebalance.  Bank stocks rose on announcements that they would increase dividends and increase share repurchase program.  The Delta variant of Covid-19 hindered the international market’s performance on fears that some geographies would impose new lockdown measures.  Japan is currently contemplating a one-month lockdown in front of the summer Olympics.

For the week, the S&P 500 gained 1.7% and closed above 4300.  The Dow was up 1%, the NASDAQ increased 1.9%, and the Russell 2000 gave back 1.2%.  The US Treasury curve flattened as the 2-year note yield fell one basis point to 0.24%, and the 10-year yield fell eleven basis points to close at 1.43%.  Oil prices increased by $0.86 or 1%, to close at $74.92 on news that OPEC will provide less supply than initially expected; the group did extend discussions into the upcoming week.  Gold prices increased by $8.40 to close at $1786.70.

On Friday, the Employment Situation Report showed that 850k non-farm payrolls had been created, beating the consensus estimate of 680k.  However, the Unemployment rate ticked higher to 5.9%; the consensus estimate was 5.7%.  Average hourly earnings were also weaker than expected, coming in up 0.3% month over month.  The Labor participation rate stayed at 61.6.  Initial claims for the week came in at 364k versus the estimate of 400k, and continuing claims came in at 3.46 million, which was a bit higher than the prior reading.  ISM manufacturing showed the 13^th consecutive expansionary reading coming in at 61.6.  Consumer Confidence for the month came in better than expected, coming in at 127.3, which was much better than the anticipated 120.

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