Market Report Jul 09 2023

The Non-Farm Payroll data came in slightly below expectations this week, with a gain of 209,000, marking the smallest increase since 2020. This data will be a key consideration for the Federal Reserve in its rate hike decision scheduled for July 26th. Further economic news is anticipated, and the Fed's next policy announcement is expected around September 20th, in between which three Consumer Price Index (CPI) reports will be published. These will likely influence the Fed's decision-making process.

Earnings season begins this week, starting with banks. JP Morgan is projected to report its fourth straight quarter of increased earnings, while Wells Fargo is expected to post its largest earnings increase since Q3 2021. The earnings performance of these institutions will be keenly watched by market participants.

The market is currently in a bullish phase, despite some traders having initially been caught offside. Short sellers, expecting a downward trend, have been closing their positions at the fastest rate in almost three years, a move which has partly contributed to the upward movement in the market.

Funds have been buying into Tesla and Microsoft, albeit at different rates. While Tesla has seen roughly $72 million in investments recently, Microsoft has attracted approximately $1.5 billion.

On a side note, the Bank of England has hired a digital payments company, Nuggets, to develop a digital currency as the UK moves increasingly towards a cashless society. The digital currency, tentatively called Britcoin, is under consideration, indicating the seriousness with which the bank is taking this move. This initiative, however, is expected to materialize, if approved, only in the second half of this decade.

Anne Chapman

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