Title: Strong Inflation and Job Reports Drive Markets Higher as Q2 Earnings Season Wraps Up
Last week saw promising data on inflation and jobs leading to a solid week for US Markets, with the S&P 500® logging seven consecutive days of gains. The week kicked off with a report showing wholesale inflation rose 2.2% YoY in July, followed by the Consumer Price Index posting a 2.9% YoY increase. With inflation moving in the right direction, the probability of rate cuts during the next three FOMC meetings have increased according to the CME Group’s FedWatch Tool.
Retail sales increased 1% last month while jobless claims fell to 227,000, indicating a strong consumer and labor market. On the earnings front, companies like Home Depot and Walmart shared different observations on the US consumer, with Home Depot citing uncertainty in the economy while Walmart noted a resilient consumer base.
Looking ahead, this week will see reports from retailers like Target, Macy’s, and Urban Outfitters, as students stock up for the fall. The Q2 2024 earnings season will conclude with a blended EPS growth rate of 10.9%. This sets the stage for the upcoming Q3 2024 earnings season, beginning on October 11 with reports from big banks like JPMorgan Chase, Wells Fargo, and Citigroup.
In conclusion, the strong market performance driven by positive inflation and job reports, along with robust retail and enterprise tech earnings, signals a healthy economy. Consumers remain resilient, with companies adjusting their guidance to reflect this confidence. As we move into the next earnings season, it will be important to monitor these trends to make informed financial decisions.