As of the closing bell on Friday, July 22nd, the S&P 500 is up 4.73% for the month of July. This recent upturn is a bit of positive news that helps offset the tough losses sustained in the first half of the year. From our view, several recent data points from manufacturing, supply chains, housing, and more potentially suggest the worst of the painful inflation surge may be over1, which has allowed the markets a bit of breathing room over the last few weeks.  

The week ahead will offer further insight into whether the recent bounce in stocks should be treated with more cheer or strong skepticism. Over 170 companies in the S&P 500 will report earnings this week including bellwethers like Microsoft, Apple, Amazon, Coca-Cola, McDonald’s, Alphabet, Visa, Pfizer, Honeywell and many more1. We also anticipate the release of pivotal economic data such as the Case-Shiller Home Price Index, GDP, Mortgage Applications, New Home Sales, the Federal Reserve’s interest rate decision and press conference, and the Fed’s preferred inflation gauge the Personal Consumption Expenditure Prices Index1. These vital signs will help to give us a more complete picture of the current health of the economy and foreshadow what we may expect to see in the coming weeks.

We will gain further clarity around the magnitude of economic slowing in the face of an aggressive Federal Reserve, as well as how companies are adapting to the shift in monetary policy. The bond markets should expect increased transparency around inflation expectations and Fed policy which will likely influence the shape of the Treasury yield curve, (the current contour is signaling the potential for a bumpy economic road ahead, as of now).

We will be following all these data points closely this week and using this information to determine if adjustments to our strategies may be warranted. We know that we have offered this advice previously, but we believe that history underscores the truth that challenging economic environments such as these require immense levels of patience, balance, and discipline from investors. We remain vigilant for opportunities that may present themselves in the coming weeks but think investors should be prepared for continued volatility through the balance of the summer.

 

Thank you for your confidence in our team during this heightened period of volatility,

 

Asset Management Department

Sequoia Financial Group

 

Sources: 1. Bloomberg/Bloomberg News, 2. Morningstar Direct

The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

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Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

All Eyes on The Fed and Earnings This Week | Sequoia Financial Group

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