Weekly Market Recap – July 14, 2023
The major U.S. stock indexes made a recovery of around 2% to 3%, surpassing their previous week’s losses and reaching the highest levels in 15 months. The NASDAQ had its strongest weekly performance in four months, with a gain of over 3%.
A report released midweek on U.S. inflation provided a boost to the stock market. The government’s Consumer Price Index dropped to an annual rate of 3.0% in June, the lowest level since March 2021. This marked a steady decline from the peak of 9.1% seen in June 2022. Additionally, a separate report showed a decrease in inflationary pressures at the wholesale level.
The latest inflation data alleviated concerns about the pace of future interest-rate increases, leading to a reversal of the sharp rise in government bond yields observed the previous week. The yield of the 10-year U.S. Treasury bond decreased from 4.05% at the end of the previous week to 3.82% on Friday. The yield of the 2-year note fell from 4.94% to 4.73%.
Earnings season began in full swing on Friday, with three major U.S. banks reporting second-quarter results that exceeded analysts’ expectations for both net income and revenue. However, analysts were forecasting an overall average decline of 7.1% in earnings for all companies in the S&P 500, as of Friday, according to FactSet.
An indicator tracking U.S. consumer sentiment reached its highest level since September 2021. The preliminary reading from the University of Michigan’s Consumer Sentiment Index on Friday showed a substantial increase of 13% from the previous month, surpassing economists’ expectations.
Oil prices continued their upward trend for the third consecutive week, with U.S. crude reaching as high as $77 per barrel on Friday morning before settling around $75. This was an increase from the recent low of approximately $68 observed on June 27.
The index measuring investors’ expectations of short-term U.S. stock market volatility experienced a decline of about 10% during the week. Following the increase in the previous week, the Cboe Volatility Index retreated to a level slightly above the multi-year low it reached on June 22.
A report on U.S. retail sales scheduled for release on Tuesday will provide insight into whether the positive momentum seen in April and May extended into June. Despite inflationary pressures, there was a 0.3% increase in month-over-month retail sales in May, following a 0.4% rise in April. Retail sales had been trending negatively as recently as March.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| Wholesale inventories | May | 0.0% | -0.3% |
| Consumer credit | May | $7.2B | $20.3B |
| NFIB optimism index | June | 91 | 89.4 |
| Consumer price index | June | 0.2% | 0.1% |
| Core CPI | June | 0.2% | 0.4% |
| CPI year over year | 3.0% | 4.0% | |
| Core CPI year over year | 4.8% | 5.3% | |
| Initial jobless claims | July 8 | 237,000 | 249,000 |
| Producer price index | June | 0.1% | -0.3% |
| Core PPI | June | 0.1% | 0.0% |
| PPI year over year | 0.1% | 1.1% | |
| Core PPI year over year | 2.6% | 2.8% | |
| Federal budget | June | -$228B | -$89B |
| Import price index | June | -0.2% | -0.6% |
| Import price index minus fuel | June | -0.4% | -0.1% |
| Consumer sentiment | July (prelim) | 72.6 | 64.4 |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 34,509.03 |
| Nasdaq Composite | 14,113.70 |
| S&P 500 Index | 4,505.42 |
| CBOE Volatility Index | 13.34 |
| S&P GSCI | 562.51 |
| U.S. Dollar Index | 99.914 |
| 10-Year T-Note (Sep ’23) | 112-180 |
| Crude Oil WTI (Aug ’23) | 75.42 |
| Natural Gas (Sep ’23) | 2.530 |
| Gold (Aug ’23) | 1,964.4 |
| Silver (Sep ’23) | 25.194 |
| Corn (Dec ’23) | 513-6 |
| Wheat (Sep ’23) | 661-4 |
| Soybean (Nov ’23) | 1370-6 |
| Coffee (Sep ’23) | 160.80 |
| Sugar #11 (Oct ’23) | 24.32 |
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