Stocks opened slightly lower. Market participants are digesting the implications of the strong June jobs report again today as many return from vacations. In the opening minutes of trading, stocks fell as prospects for less easing from the Federal Reserve (Fed) are having more impact than the surprising resilience of the job market in the face of global trade tensions and lackluster economic growth overseas.
Job market stands strong. The June jobs report was solid. Labor market conditions rebounded last month from a disappointing May, easing market worries about the impact of trade tensions on corporate hiring. While a resilient job market could buoy the United States’ otherwise moderate economic prospects, it could also complicate the Fed’s policy decision-making. We’ll explain more in this week’s Weekly Economic Commentary.
Even after such a strong first half of this year, we think stocks may have more left in the tank. The S&P 500 Index gained 17.4% during the first half, the best start to a year for the stock market since 1997, and its tenth-best start since 1950. It’s not easy, but we actually found a reason to be critical of this powerful bull market as we discuss in today’s LPL Research Blog. Later today, in this week’s Weekly Market Commentary, we will recap the first half of 2019 and analyze prior strong starts to see what we might expect in the second half of 2019.
The week ahead. The economic docket this week brings a bevy of consumer and producer price data, as the United States, Germany, and China are all set to report inflation numbers. We will get the Fed’s FOMC meeting minutes on Wednesday and Chairman Powell’s congressional testimony on Wednesday and Thursday. With quarter-end behind us, the market’s attention will begin to turn toward the upcoming second quarter earnings season.
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