From the desks of Stanley Katz & Lauren Madera
STAY SAFE & HEALTHY!
How does the song go? “Two Out of Three Ain’t Bad!” That’s what happened last week as the major US stock market indices posted gains in the S&P 500 and Nasdaq but a slight loss in the DJIA (i.e., DJIA: -0.13%, S&P 500: +0.35%, Nasdaq: +2.15%). Friday’s jobs report came in exceptionally strong producing a 3.5% unemployment rate, which seems to indicate we aren’t in a recession—yet! That’s the good news. Though the counterpoint appears the Federal Reserve may have to employ further rate hikes. The next Fed Open Market Committee meeting will be conducted September 21st. For more insight on our recession fears click the Capital Group piece below.
In the meantime, 2Q2022 earnings reports continue to provide solid results. With over 80% of the S&P 500 having reported, revenues across the board increased an average of 13% while 77% of the companies reported better than expected earnings. July’s run up in stock market prices has the S&P 500 trading at a Price-to-Earnings ratio of 17.7X, up from 16X. As interest rates rise in the US and the dollar gains strength, US-based large-cap companies that do business worldwide will face two headwinds: slowing worldwide economies and currency impact on their earnings. As a result, we may still see volatility in the US stock market indices both to the upside as well as the downside. Take a look at the Schwab link below titled “The Strong Dollar: Can It Continue?”
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
Goldman Sachs Asset Management:
The Independent Adviser:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
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