Wall Street ended the holiday-shortened trading week on a better note, with technology stocks leading the best way. The Dow Jones Industrial Average gained lower than 1% for the week. The S&P 500 and Nasdaq each closed at record highs on Friday, rising nearly 2% and three.5% for the week, respectively. The first week of July continued the strength seen in June, the second quarter and the primary half of 2024. The S&P 500 technology sector was the massive winner last week, with Apple and Broadcom our top club stocks. Consumer discretionary and communications services, including Meta Platforms and Alphabet, were also strong. Energy led the decline this week, followed by healthcare and industrials. Looking back on the week, which was short given the early close on Wednesday and the time off Thursday, we got some notable news on the economy and heard from club holding Constellation Brands. Quarterly results from brewer Corona and Modelo on Wednesday were decent, and the stock initially rose on the news. Just before the market opened, we told members we could be taking some profits on Constellation. However, the struggling wine and spirits business remained a problem that management will need to handle in the approaching quarters. Shares closed down over 3% on Wednesday but largely recovered on Friday to post a comparatively stable week. Contributing to Friday’s largely higher session were lower bond yields — triggered by an increase within the June unemployment rate to 4.1% and only barely higher-than-expected gains in nonfarm employment of 206,000. Wage inflation was right consistent with expectations. Overall, the federal government’s monthly jobs report supported the Federal Reserve’s case for cutting the benchmark rate of interest at its September meeting. While market odds favor a second cut in December, the Fed forecast just one rate cut this 12 months after its June meeting. There was also news on the manufacturing sector last week. On Monday, the ISM manufacturing purchasing managers’ index for June got here in weaker than expected, pointing to a faster-than-expected decline, and on Wednesday, factory orders numbers for May showed a monthly decline versus expectations of a slight increase. The ISM services PMI for June, released on Wednesday, also disillusioned, because it showed a contraction within the services sector. Economists had expected an expansion. These readings were also the green light for the Fed to begin cutting rates of interest. We hope everyone had a glad Fourth of July and a calming weekend. You’ll need to benefit from the lull, because imagine it or not, earnings season is back. Three of the 4 major central banks report next Friday, including Wells Fargo. The government also provides essential data on consumer and wholesale inflation. Economic data: The Consumer Price Index (CPI) for June will probably be released on Thursday morning and the Producer Price Index (PPI) for June will probably be released on Friday morning. Of the 2, the patron price index (CPI) carries the greater weight since it more accurately reflects what consumers pay for a basket of products from one 12 months or month to the subsequent, which is the Fed’s primary concern. The producer price index (PPI), nonetheless, is essential to trace since it tells us what’s happening at the price input level for businesses. That tells us something about margin dynamics — and may due to this fact tell us each about profitability and potential pricing actions corporations need to soak up the longer term to guard their profitability. In the patron price index data, you’ll want to listen to the housing component, which has been a significant thorn within the Fed’s side. Housing, a barometer of what people pay for housing, has proven to be a really stubborn source of inflation — an issue since it’s a high and unavoidable cost for many Americans. For the headline consumer price index, economists expect an annual increase of three.1%, in line with FactSet on Friday. The core consumer price index, which excludes food and energy prices, is predicted to rise 3.5% 12 months over 12 months. If that happens, it might represent a slight slowdown on the headline level but a slight acceleration on the core level. For the producer price index (PPI), economists expect a 2.3% annual increase on the headline level and a 2.5% annual increase on the core level. Those numbers could be barely higher than what we saw in May. Earnings season: Within the portfolio, the online interest income (NII) forecast will probably be a key piece of monitoring when Wells Fargo releases its quarterly report next Friday. At an industry conference on Tuesday, CFO Michael Santomassimo reiterated the forecast for a 7% to 9% year-over-year decline in NII. We still think that forecast could possibly be conservative, because the Fed’s higher-for-longer policy generally provides a tailwind for net interest income. However, other aspects akin to muted loan demand have kept Wells Fargo from raising its forecast this 12 months. We took some profits last Friday, given the strong recent gains in shares of Wells Fargo and our other club bank, Morgan Stanley. Morgan Stanley will report its results on Tuesday, July 16. We’re also curious to see what management thinks concerning the planned pace of share buybacks within the second half of the 12 months after the stress test results are available. Wells Fargo — and our other bank name, Morgan Stanley — each passed the test, suggesting they’ve strong capital positions with excess money to return to shareholders. Other key points within the Wells Fargo report include comments on the state of consumer savings, a sign of future purchasing power, and the housing market, which we have been watching because the post-Covid world finds a brand new normal. Monday, July 8 No major events Tuesday, July 9 No major events Wednesday, July 10 No major events Thursday, July 11 8:30 a.m. ET: Consumer Price Index 8:30 a.m. ET: Initial Jobless Claims Pre-market results: PepsiCo (PEP), Delta Air Lines (DAL), Conagra Brands (CAG) Friday, July 12 8:30 a.m. ET: Producer Price Index Pre-market results: Wells Fargo (WFC), JPMorgan Chase (JPM), Citigroup (C) (A full list of stocks in Jim Cramer’s Charitable Trust will be found here.) As a subscriber to CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. After sending a trade alert, Jim waits 45 minutes before buying or selling a stock from his charitable trust’s portfolio. If Jim has discussed a stock on television, he’ll wait 72 hours after the trade alert is issued before executing the trade. THE INFORMATION REGARDING INVESTING CLUB DESCRIBED ABOVE IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY AND OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR OBLIGATION IS OR WILL BE CREATED BY RECEIVING INFORMATION RELATED TO INVESTING CLUB. NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.
On July 4, 2024, Independence Day in New York (USA), the US flag hangs on the New York Stock Exchange constructing.
Beata Zawrzel | Photo only | Getty Images
Wall Street ended the holiday-shortened trading week with a gain, led by technology stocks.
