Market Snapshot |

Market Commentary
by Scott J. Brown, Ph.D., Chief Economist

Next week, the economic calendar is full. The Federal Open Market Committee is widely expected to leave monetary policy unchanged, and it is unlikely that Chair Powell will signal an upcoming tapering of the monthly pace of asset purchases. Officials will not revise their economic projections (no new dot plot). The Bureau of Economic Analysis will release its advance estimate of 2Q21 GDP growth, which should be strong. This release will also include annual benchmark revisions, which may shift the quarterly numbers around but are unlikely to alter the bigger picture. The Employment Cost Index will provide an update of labor cost pressures. The June report on personal income and spending will contain the latest reading on the PCE Price Index (the Fed’s key inflation gauge), but quarterly figures will have already been included in the GDP report.

Indices

	Last	Last Week	YTD return %
DJIA	34823.35	34987.02	13.78%
NASDAQ	14684.60	14543.13	13.94%
S&P 500	4367.48	4360.03	16.28%
MSCI EAFE	2311.97	2311.97	7.66%
Russell 2000	2199.48	2190.29	11.37%

Consumer Money Rates

	Last	1 year ago
Prime Rate	3.25	3.25
Fed Funds	0.08	0.08
30-year mortgage	2.88	2.87

Currencies

	Last	1 year ago
Dollars per British Pound	1.3772	1.274
Dollars per Euro	1.1777	1.160
Japanese Yen per Dollar	110.43	106.86
Canadian Dollars per Dollar	1.257	1.341
Mexican Peso per Dollar	20.023	22.518

Commodities

	Last	1 year ago
Crude Oil	71.76	41.07
Gold	1807.30	1917.40

Bond Rates

	Last	1 month ago
2-year treasury	0.20	0.26
10-year treasury	1.30	1.48
10-year municipal (TEY)	1.307	1.569

Treasury Yield Curve – 07/23/2021

S&P Sector Performance (YTD) – 07/23/2021

Economic Calendar

July 26	—	New Home Sales (June)
July 27	—	Durable Goods Orders (June)
	—	CB Consumer Confidence (July)
July 28	—	FOMC Policy Decision, Powell Press Conference
July 29	—	Jobless Claims (week ending July 24)
	—	Real GDP (2Q21 advance estimate, benchmark revisions)
	—	Pending Home Sales Index (June)
July 30	—	Employment Cost Index (2Q21)
	—	Personal Income and Spending (June)
	—	Chicago Business Barometer (July)
	—	UM Consumer Sentiment (July)
August 2	—	ISM Manufacturing Index (July)
August 4	—	ISM Services Index (July)
August 6	—	Employment Report (July)
September 6	—	Labor Day Holiday (markets closed)
September 22	—	FOMC Policy Decision

 

All expressions of opinion reflect the judgment of the author and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor’s returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business July 22, 2021.