Key Economic Events That Moved the Markets in July 2019

S&P 500 from July 1 to July 31, 2019

July 1

• Stock indices advanced upon open with the S&P 500 reaching a new record high.
• Despite a lower close, the opening market rally was likely supported by the G20 summit’s promising news that President Trump and China’s President Xi agreed to restart trade talks.
• PMI manufacturing index rose by 5 tenths to a reading of 50.6 (slightly above consensus).
• ISM manufacturing reading for June came in at 51.7, slightly lower than the highest consensus range of 53.0 but the slowing still came in within consensus range.
• Construction was down -0.8 percent in May, below economist expectations.

July 2

• After yesterday’s record highs in the S&P 500 index, stocks opened slightly lower today.
• No major economic reports released today.

July 3

• Indices rallied again, the S&P 500 hitting another record high, as the market focused less on the ongoing US-China trade tensions and more on the likelihood of central banks across the globe lowering interest rates.
• ADP employment report showed 102,000 private-sector jobs were created in June, short of economist expectations of 140,000 new jobs.
• Initial jobless claims fell 8,000 to 221,000.
• Factory orders declined by – 0.7 percent, below -0.5% consensus expectations.

July 5

• S&P 500 futures rallied to another record high but backed off slightly when the US employment situation showed strong gains.
• Job gains tend to cool expectations of a larger Federal Reserve rate cut.
• No other major economic news was reported today.

July 8

• Although no major economic reports were released today, U.S. indices slipped slightly as bank and tech shares pressured the market downward as investors await the Federal Reserve’s next move.
• Following the previous sessions’ record-setting highs, the market is now focused on how soon and how much the Fed might trim interest rates.

July 9

• Indices opened lower as investors are beginning to worry about the extent to which the US-China trade dispute may affect earnings.
• The June NFIB Small Business Optimism Index was 103.3, lower than the expected reading of 104.
• The May Job Openings and Labor Turnover Survey (JOLTS) came n at 7.323 million, lower than the anticipated figure of 7.4 million.

July 10

• Fed chairman Powell announced that a rate cut, possibly this month, may be forthcoming.
• The market’s relief in hearing this statement was evident in its advance toward another record-setting high.
• The S&P 500 nudged above the 3,000 mark for the first time ever though it did not close above above it.

July 11

• Optimism regarding yesterday’s statement by Fed chairman Powell continues to support the broader market.
• Powell said that the economic outlook has not improved over recent weeks, and that uncertainties surrounding trade tensions and the global economy continue to weigh on the US economy.
• The FOMC minutes also showed consensus among central bank officials in support of a rate cut.
• Jobless claims fell 13,000 to 209,000 in the week ended July 6, lower than economist expectations of 224,000 new claims.

July 12

• Indices rose on limited news.
• The rally appears to be steaming ahead on Powell’s congressional testimony last week, setting the stage for the central bank to lower rates.
• S&P 500 closed above 3,000 for the first time ever.

July 15

• Markets took a breather from its record-breaking rally last week, with traders preparing for the corporate earnings to roll in.
• Empire State Manufacturing Index jumped to 4.3 in July from -8.6 in June–economists having expected a reading of 0.8.

July 16

• Indices backed off from its record highs slightly despite a strong read on the US consumer.
• S. retail sales increased 0.4% in June, higher than an expected 0.1% gain.
• Prices for foreign imports to the U.S. declined 0.9% in June, indicating that inflationary pressures have been limited thus far.
• Industrial production in June remained unchanged while capacity utilization in June came in lower at 77.9% as compared with expectations of 78.2%.

July 17

• Indices fell on yesterday’s comments from President Trump that trade talks between the US and China have stalled, and that new tariffs on $325 billion of Chinese goods may be imposed in the coming months.
• Housing starts fell 0.9% in June from the prior month to1.253 million while a figure of 1.260 was expected.
• Residential building permits declined by 6.1% from May– the biggest monthly drop since March 2016.

July 18

• Stocks bounced on rumors that the Fed may take a more aggressive approach to cutting interest rates than previously expected.
• New York Federal Reserve Bank President John Williams when he suggested the Federal Reserve should be more aggressive in its monetary policies in an effort to prevent a slowdown in the U.S. economy.
• Initial jobless claims increased 8,000 to 216,000.
• The Philadelphia Federal Reserve business outlook survey soared to a 2-month high and jumped by the most in a decade.

July 19

• In contrast to yesterday’s gains, likely due to John William’s comments, the Fed attempted to temper the comments when James Bullard said a 25 basis point rate cut in the near term would be appropriate.
• The consumer sentiment index is expected to be 98.4, within consensus range.

July 22

• The S&P 500, Dow Jones, and Nasdaq advanced despite signs of weaker economic activity as measured by today’s Chicago Fed National Activity Index, which is the only economic report to be released today.
• Economists expected 0.1 from the National Index while the figures came in at -0.02.
• It’s earnings season, and this week will see over 140 S&P 500 companies and one third of the Dow Jones companies reporting Q2 earnings.
• After a strong beginning last week, earnings are anticipated to be relatively strong, though the dominant factor supporting the current rally is the expectation of a forth coming Fed rate cut.

July 23

• Indices advanced upon hearing the news that in-person trade talks between the U.S. and China would begin Monday.
• Solid earnings from multinationals contributed to today’s soft advance.

July 24

• Despite reports from the International Monetary Fund’s quarterly World Economic Outlook that saw global economic growth slowing by 3.2% this year, US markets had a relatively sizable advance, as the IMF’s US outlook expects the US economy to grow 2.6% in 2019.
• New Home Sales came in at a lower-than-expected 646,000 annual rate, below the 660,00 consensus. The housing trend is visibly fading at the half-way point, opening the year on a solid rise before flattening out and slowing in May and June.

July 25

• Indices advanced as the ECB indicated plans for further monetary easing later this year.
• Markets are also supported by optimism ahead of in-person US-China trade talks this Monday through Wednesday.
• Durable goods in June increased 2.0% following May’s 2.3% decline, beating market expectations of a 0.7% gain.
• Weekly US jobless claims fell 10,000 to 206,000 in the week ended July 20 when economists predicted initial claims would be 220,000.

July 26

• The broader stock market advanced to new highs on news that the second quarter U.S. gross domestic product increased 2.1% on an annualized basis beating economist expectations of 1.9%.
• Consumer spending by 4.3% in the second quarter as compared with expectations of 3.9%.

July 29

• No major economic news today as investors await the coming FOMC meeting beginning tomorrow.

July 30

• The two-day Federal Open Market Committee meeting begins today.
• Personal income in June increased 0.4% when up .3% was expected and consumer spending advanced .3%, which was as anticipated.

July 31

• Wall Street got the Federal Reserve rate cut it expected, but the broader market didn’t like the message within which it was delivered, as Fed Chair Powell did not commit to any further rate cuts for the coming year.
• The Dow dropped 478 points during Powell’s press conference, closing the day with a loss of 33 points, and the S&P 500 lost 1% for the day.
• The U.S.-China trade talks concluded today without any major breakthrough, and the two sides are expected to meet again in September.
• The July Automatic Data Processing employment change report showed an increase of 156,000 private sector jobs. Economists forecasted a gain of 155,000.

 

Karl Montevirgen

Market Strategist | Halifax America

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