- Stocks rebounded last week and were positive across all major indexes. We saw global markets (represented by the MSCI All Country World Index) up 2.3% and domestic stocks (represented by the S&P 500 Index) up 2.8%. It was U.S. small companies leading the pack for the week, posting a 4.3% return (represented by the Russell 2000 Index).
- As we head to the end of Q2, many companies have provided earnings guidance that is more positive than market expectations. What that indicates is a large chunk of S&P 500 companies foreseeing strong earnings for both Q2 and the rest of 2021.
- In a bipartisan effort, President Biden announced a $1 trillion infrastructure package last week. The next step is working with Congress to get the bill passed.
- Recently, we mentioned how the Fed increased their inflation expectation for 2021. Last week, Fed Chair Jerome Powell reiterated their stance that they believe inflation will be transitory and will likely ease as the year progresses. While unlikely, we still see an overheating economy as one area that may throw a wrench into this economic and market recovery.
- Oil continues to rise week after week, with the price per barrel climbing above $74.
- The next monthly jobs report will come out on Friday when we’ll get a glimpse of where unemployment stands in the U.S. through the end of June.
- In the June preliminary Purchasing Managers’ Index, we saw that output is expanding at a very fast pace. This speaks well to many areas of the economy, especially manufacturing. The one downside shows that firms are still struggling with supply chains and the ability to meet the demand for goods and services. We expect that to normalize as the year continues, but will likely be a headline in the short term.
- I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.
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