Last week was the third straight weekly gain for the U.S. stock market, as gauged by the S&P 500 index. It has been refreshing to see positive action for stocks since June 16. The market must now decide whether to break through the June highs or dip down within its summertime range.
An apparently strong jobs report on Friday seemed to ease some recession fears. It was good news, at least temporarily. Many investors are encouraged at how resilient the labor market is despite inflationary pressures within the economy.
Speaking of inflation, the Bureau of Labor Statistics will release the July consumer price index (CPI) reading on Wednesday. CNBC reports that the CPI data “will give investors more clarification about the [Federal Reserve’s] next move at its policy meeting in September. Traders are now pricing in a higher likelihood of a 0.75 percentage point hike next month, which would be the third straight increase of that magnitude.”
Dow Jones estimates a CPI reading of 8.7% in July, compared to 9.1% in June. Hopefully inflation has peaked. Yet even so, living costs are higher and interest rates are rising. Mix these concerns with a robust labor market, and the confounding economic story of 2022 continues.
