Last week, economic data took a backseat to political news, but investors were still keeping an eye on the latest jobs report. While June’s numbers met expectations, revisions to May and April data hinted at a slightly weaker economy, sparking talks of a potential interest rate cut sooner than expected.
According to CME FedWatch, the likelihood of two or more 0.25% interest rate cuts by the end of the year has increased to 77%. This shift in expectations has investors on edge as they navigate market uncertainties.
In the US, large-cap stocks outperformed their small-mid cap counterparts, with technology giants like Apple, Microsoft, Meta Platforms, and Alphabet driving returns. The market’s focus on sentiment-driven investments highlights the challenge of finding value in a volatile market.
As earnings season kicks off, banks are expected to report a 10% decline in profits compared to last year. Despite these projections, there are opportunities for value investors, with Morningstar analysts identifying undervalued companies in the banking sector.
This week, all eyes will be on the June Consumer Price Index (CPI) report, which will shed light on inflation trends. Federal Reserve Chair Jerome Powell’s speeches and inflation data will be closely watched, but investors should prioritize long-term strategies centered on quality and value.
Overall, while short-term economic shifts may create fluctuations in the market, staying focused on fundamental investing principles can help navigate uncertain times. DailyBubble believes in the importance of maintaining a balanced investment approach amidst market volatility.