Good Morning,
Happy Monday and the first full week of August. I have definitely noticed it getting darker earlier!
The markets opened notably higher this morning after a rough close on Friday to kick-off August. Aside from any current events, August and September historically tend to include more volatility as we make our way to the prime holiday shopping season. Earnings have largely outperformed thus far but markets were spooked Friday after the latest jobs numbers came in weaker than expected with additional downward revisions to previous months. I think the momentum we are seeing this morning is anchored in more confidence that the Fed will begin to cut rates with odds now over 80% for a cut in September. I do think the Fed has room to cut in September with at least one additional by year-end. Rates coming down should not only provide a tailwind for stocks but also the real estate market over time. Given the fast paced nature of this market, I continue to see pull-backs like last week as longer term buying opportunities. I think we remain on solid footing with additional progress on the trade front being a catalyst for the next leg higher.
Please find this week’s Market Strategy Radar Screen Report from John Stoltzfus, Chief Investment Strategist of Oppenheimer Asset Management. A look at Q2 GDP and bond prices, are among the topics.
Have a great week!