Stocks End Modestly Lower To Start The Month  Image: Bigstock Stocks closed modestly lower to start the new month. But it's worth repeating how stellar the month of July was: the Dow was up 6.73%, the S&P was up 9.11%, and the Nasdaq was up 12.35%. The major indexes are still down double-digits from their highs. But it's been 6 weeks since the market hit bottom. And if all goes well, this week will make seven. A better than expected earnings season helped lift stocks last week. Especially from big tech names like Apple, Amazon, Google and Microsoft. Earnings season continues this week with another 327 companies set to report today (1,700 in total between today and the rest of the week). In addition to a strong earnings season, last week's FOMC Announcement was cheered by the market as well. While they raised rates by another 75 basis points, and suggested they'll keep raising rates through the rest of the year, they stopped short of saying how big they'll go at their next meeting in September, and said they will look at the data at that time and make the decision then. There was also a feeling that with the economy slowing as it has, the Fed may not need to be as aggressive as some had feared earlier in the year. In fact, there's growing speculation that the Fed may even need to lower rates next year, once inflation makes a noticeable downturn. That idea was reflected in the 10-year Treasury yield which fell to 2.642 last week from their mid-June high of 3.483. And yesterday it fell again (-1.36%) to close at 2.606. In other news, the PMI Manufacturing report put the index at 52.2, just under last month's 52.3. The ISM Manufacturing Index came in at 52.8. That was just below last month's 53.0, but better than the consensus for 52.2. Construction Spending, however, fell -1.1% m/m vs. last month's revised 0.1% pace and estimates for 0.2%. On a y/y basis, it was up 8.3% vs. last month's 9.7%. Today we'll get Motor Vehicle Sales, and the Job Openings and Labor Turnover Survey report (or JOLTS for short). But the report everybody is really waiting for is the always important Employment Situation Report on Friday. Even though we technically fell into a recession after last quarter's -0.9% GDP print (Q1 was down -1.6%, making it two quarters in a row of negative GDP, which is the long held definition of a recession), some have pointed to the strong labor market as reason for rejecting that assertion this time around. So this upcoming Employment Report will take on added significance. We've been averaging 375,000 new jobs per month for the last 3 months. While nobody is expecting that this month (the consensus is for 250,000), a strong showing will be needed to keep that narrative alive. In the meantime, we've got plenty of other reports to get thru first this week, not to mention earnings. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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