Dear valued client,
Markets rose again in a shortened trading week for American Independence Day.
We are past the halfway mark of 2024, and in the first half of the year, the stock market saw impressive gains, with the S&P 500 rising 15%, largely driven by Nvidia’s 150% surge. Despite no interest rate cuts from the Federal Reserve, the S&P hit 31 all-time highs, supported by robust earnings, a resilient economy, and AI enthusiasm. In contrast, the Dow lagged with only a 4% increase, hampered by significant declines in stocks like Nike, Intel, and Boeing. Commodities like cocoa and gold soared, while the Japanese yen hit a 38-year low. Historically, a strong first half of a calendar year often signals continued strength in the second half.
This morning, the U.S. Bureau of Labor Statistics released June employment data, revealing job additions of 206,000, slightly above economists’ estimate of 200,000, but below the May figure of 218,000. The unemployment rate rose to 4.1%, and hourly wages increased by 0.3%, consistent with expectations but slower than the previous month’s 0.4% gain. Additionally, Fed Chairman Jerome Powell highlighted progress toward reducing inflation while maintaining economic stability, but he emphasized the need for more evidence of confirmed inflation control before cutting interest rates. The next Federal Open Market Committee meeting is on July 30-31, with potential rate cuts anticipated in September.
In political news, following a poor debate performance, President Biden is in damage control mode, speaking at fundraisers in New York and New Jersey to reassure wealthy supporters of his mental fitness. Top Democrats, including Rep. Nancy Pelosi, appeared on Sunday talk shows to support Biden and counter calls for his resignation. A recent CBS poll shows that only 27% of registered voters believe Biden has the mental and cognitive health to serve, a drop from 35% in early June.
On the other hand, Trump’s campaign dealt with more positive news this week as t
he Supreme Court’s recent ruling grants Trump significant immunity. The 6-3 decision provides absolute immunity for core constitutional acts and presumptive immunity for other official acts. This decision complicates the prosecution of Trump for his efforts to overturn the 2020 election, particularly regarding his interactions with the Justice Department and actions during the January 6th debacle. However, he may still face prosecution for pressuring state officials. This ruling could influence Trump’s criminal cases and the upcoming election, potentially affecting voter turnout and sentiment.
In the UK, voters ousted the Conservative Party after 14 years in power, giving the Labour Party its largest majority in history. Led by Keir Starmer, the Labour Party won 410 of 650 seats in the House of Commons, while the Conservatives, under Rishi Sunak, secured just 131 seats, the fewest in the party’s history. The economy, which has struggled with high inflation, stagnant wages, and a weakened pound, was a key issue for voters. Starmer, the new prime minister, has pledged to rebuild Britain by boosting economic growth, improving public services, and addressing the impacts of Brexit and political instability.
For those who have a few billion dollars on hand, the owners of the reigning NBA champions, the Boston Celtics, are planning to sell a majority stake, potentially setting a new record for the most expensive NBA team sale. Currently valued at $5.1 billion by Sportico, this sale would surpass the $4 billion record set by the Phoenix Suns last year. The Celtics, bought for $360 million in 2002, are expected to provide a substantial return on investment for the current ownership group.
“Concentrate on the small miracles of daily life. You are capable of seeing what is beautiful because you carry beauty within yourself, for the world is a mirror and reflects back your own attitude. Know your faults and limitations, and do all you can to maintain resolve in moments of crisis. The world is doing its best to help you, even though everyone around seems to be saying the opposite.” – Paulo Coelho
Have a terrific weekend,
PW
