Market Drama
Featuring Zoe CEO & Founder, Andres Garcia-Amaya, CFA
Watch Time: 4.4 minutes
Welcome to this week’s Market Drama!
Stock Market Updates:
- S&P 500 was down 2.1%. Up 12.1% for the year.
- Largest drop in the market this year: 5.7% drawdown from the highs we saw in July.
- This volatility is fairly normal: there has been an average 14.2% drop in the last 44 years. Yet the market for 33 of those still ended up.
- The drawdown is coming from the tech stocks who have been high flyers.
- Broader market is holding up, sectors like financials and industrials.
- Nasdaq was down even more, down 3.4%. Up 11.8% for the year.
- Underperforming with respect to the S&P 500 this year.
- The Bonds Aggregate Index was up 2%, now up 2.1% for the year.
Economic Updates:
- July payrolls: 114,000 jobs added, the expectation was 175,000.
- Unemployment rate jumped up to 4.3%, the consensus estimate was for 4.1%.
- Wage growth increased at 3.6% YoY, which was lower than expected.
- Earnings from tech companies that continue to perform fairly well.
- Biggest upside: cyclical and defensive sectors (financials, and healthcare) and less so from the growth sectors.
- The Fed see’s by September a higher likelihood that they will cut interest rates.
- Core inflation is at 2,6% and employment is cooling off.
- Earnings are holding up, bond yields dropped, and high flyer tech stocks have sold off (not interest rate sensitive).
- This cool off could be for the wider economy, probably a recession or just slower growth.
Stay tuned for next week.
– Andres
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