Equity returns came from unexpected areas last week as the labor market sent conflicting information to investors. Small cap stocks and "value" 
stocks were the better performers last week. Meanwhile, "growth" and momentum stocks took a bit of a back seat. If equity markets stick to historical patterns, the latter half of the year prove to be positive. When the S&P 500 Index has returned between +5% and +10% in the first 6 months of the year, the remainder of the year is positive 13 out of 15 times (or, 86%) since 1950. In addition, the month of July has been positive for the S&P 500 the last 10 years in a row. 
While overall, economic data is solid, last week's private payrolls data showed the first negative print in over 4 years. The government's payroll data showed the opposite - at least 147,000 new jobs added in June. In addition, the Unemployment Rate dipped from 4.2% in May to 4.1% in June. The Fed, however, seems to be dragging their feet when it comes to interest rates. There have been 64 rate cuts by global central banks this year and not one from the Fed. In fact, the current level of Fed Funds Rate is higher than the U.K., Eurozone, Japan, & Canada. If inflation is at 2.4% today and the Fed is forecasting inflation to be 2.6% two months from now, where is the danger in cutting rates now? Right now, the biggest risk to markets is a policy mistake by the Fed.
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Disclosures
The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.
Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
Past Performance does not guarantee future results.