Three Things to Watch
- We have a busy week of economic data highlighted by the Institute for Supply Management (ISM) Manufacturing data on Monday and the July employment report on Friday. Manufacturing has been a bright spot this year, and ISM is expected to show the seventh consecutive month of expansion, both in the overall index and the new orders reading. Meanwhile, the economy is expected to have added 88,000 jobs during the month, up from 57,000 in June, while the unemployment rate is forecast to hold steady at 4.2%.
- Second-quarter earnings continue to roll in much stronger than initially forecast. With the majority of the S&P 500 having reported, 86% have posted a positive surprise with an average surprise of 31%. This week will feature reports from Palantir, Disney, Eli Lilly, Uber and American Micro Devices. SpaceX will also post its first earnings report as a public company.
- Stocks, bonds and energy will continue to monitor developments in the Strait of Hormuz. Stock futures jumped and oil fell 7% in early trading on the news that talks will resume on Monday.
Three Things to Know
- Futures are now priced for odds of 60% that the Fed will hike rates in September and 100% this calendar year. In other words, the Federal Reserve Chair Kevin Warsh’s first move will be an interest rate increase. (Source: Bloomberg)
- The 30-year Treasury bond yield is now 5.27%, up from 4.85% at 2025 year-end and the highest yield since 2007. (Source: Bloomberg)
- The U.S. personal savings rate fell -0.1 percentage point in June, to 2.7%, the lowest since June 2022. This marks the fifth consecutive monthly decline, bringing the cumulative drop to -1.7 percentage points. This is also the third-lowest monthly reading since April 2008, during the Financial Crisis. To put this into perspective, the personal savings rate averaged ~5.5% between 2014 and 2019. The only period in modern history with similarly low saving rates was 2005-2007, when the rate fluctuated between 1.4% and 3.3%. U.S. households are struggling to save money. (Source: The Kobeissi Letter)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.
5805936- EXP: 08/31/2029