Rising concerns about further rate hikes sent stocks lower to kick off the second half of trading.
The Dow Jones Industrial Average lost 1.96%, while the Standard & Poor’s 500 retreated 1.16%. The Nasdaq Composite index surrendered 0.92% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, tumbled 2.57%.1,2,3
Stocks Slide
Stocks were dragged lower last week by news reigniting fears of additional interest rate increases. It started with the minutes from June’s Federal Open Market Committee meeting, which revealed a majority of voting members supported at least two more rate hikes. But a strong employment report from Automated Data Processing (ADP), a payroll processor, unnerved investors, sending stocks lower and bond yields higher.
Markets stabilized after Friday morning’s federal government’s monthly employment release showed a less-than-expected increase in nonfarm payrolls. But stock prices turned down in the afternoon, adding to the week’s losses.
Mixed Labor Market Signals
Wall Street was rattled by an unexpected surge in new private-sector jobs last Thursday. ADP reported private sector employers had added 497,000 jobs in June, blowing away the consensus estimate of 220,000. Leisure and hospitality led the gains with 232,000 new hires, followed by construction (97,000).4
Friday’s release of monthly employment data painted a more moderate picture, with 209,000 new jobs added in June, well below the estimate of 240,000 and May’s downwardly revised total of 306,000. Friday’s report added to data released earlier in the week (a decline in job openings and a rise in jobless claims) that suggested that the labor market may be cooling.5
This Week: Key Economic Data
Wednesday: Consumer Price Index (CPI).
Thursday: Producer Price Index (PPI). Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, July 7, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Thursday: Delta Air Lines, Inc. (DAL), Pepsico, Inc. (PEP), Cintas Corporation (CTAS).
Friday: JPMorgan Chase & Co. (JPM), UnitedHealth Group Incorporated (UNH), Citigroup, Inc. (C), Wells Fargo & Company (WFC), BlackRock, Inc. (BLK).
Source: Zacks, July 7, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
IRS Program Helps Seniors Prepare Taxes
The Internal Revenue Service (IRS) has a tool called Free File, which offers online tax preparation, direct deposit of refunds, and electronic filing choices. This tool can be helpful for taxpayers on a fixed budget, including seniors and retirees. Here are some things to know about the tool:
- IRS Free File can be found at IRS.gov and features some big names in the tax software provider world.
- To use the tool, taxpayers can browse multiple offers.
- The eligibility standards for using Free File depend on the tax partner, but they are usually based on income, age, and state residency.
- Free File has a majority of the most common forms needed when filing your taxes. Even if you have a unique tax situation, you may still be able to use Free File.
- Some Free File products are available in Spanish.
- You can also search for credits and deductions in Free File.
- Some providers in Free File also offer state return preparation. You can use the lookup tool in Free File to find the tax partner that might be appropriate for your state requirements.
- Taxpayers can access Free File through their computers, smartphones, or tablets. The site is designed for mobile usage.
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov6
