July Market Insights #2

Welcome to the second macro update of this month. July has been an extremely salient month for global equity markets due to major political developments and the upcoming Federal Reserve meeting. Equity markets will likely continue to be volatile as earnings season approaches and economic and political developments potentially continue to intensify.

Market Outlook

The S&P 500 has continued to rally this year, as most observers appear optimistic that the Federal Reserve may be able to achieve a soft landing.

Growth in the United States, especially in the services sector, still appears favorable, and other indicators like inflation and unemployment are still relatively healthy. One of the greater risks in the upcoming months could be political risks, rather than economic setbacks, although there are several noteworthy economic risks to monitor this year.

The political transition in the United States could have a substantial impact on certain sectors of the US stock market, particularly in the commodities space. Growth stocks likely need to deliver this quarter to continue their rally, and initial earnings results have not been favorable so far. The next couple of weeks could be telling as the market receives more data from the Federal Reserve and large caps begin reporting earnings soon.

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