Stocks finished last week in the red, with the S&P 500 declining 2.05%. The Fed held rates steady as expected and signaled that rate cuts are in the cards at their September meeting. With the recent market volatility, lower-than-expected hiring for June, and the unemployment rate at 4.3%, the probability of a 0.50% rate cut at their September meeting currently stands at 84%. June’s job numbers disappointed expectations, but hiring has reached average pre-pandemic levels, and the unemployment rate is still historically low at 4.3%.
Overnight, Japan’s Nikkei index fell 12.4% as the yen surged. Global investors have purchased US stocks with yen, known as a carry trade. The surge in the yen squeezed the carry trade, forcing investors to sell stocks to cover margins. US stocks are off their lows today after the ISM non-manufacturing index report released this morning indicated sector expansion.
We understand that the recent stock market volatility can induce fear and concerns for investors. However, the correction we are experiencing seems more panic-driven than data-driven. We recommend revisiting your investment objectives and staying invested to reach them. If you have cash sitting on the sideline, now could be an opportune time to invest. We encourage you to contact us with questions.
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Here’s to a great week ahead!
Thank you,
David Bennett