Marketbites: Americans Growing Richer
Portfolio Manager Commentary:
Stocks were higher Monday as Wall Street braced for quarterly reports from some of the biggest companies in the world. The Dow Jones Industrial Average traded added 0.22% to end at 34,585.35 — its highest closing level in 2023. Shares of tech-giant Apple added 1.7%, while Tesla climbed 3.2%. Shares of JPMorgan Chase ticked up 2.4%.
The second-quarter earnings season gains steam this week with results from big financial institutions such as Bank of America, Morgan Stanley, and Goldman Sachs. Results are also due from United Airlines, Las Vegas Sands, and technology giants Tesla and Netflix. Wall Street expects a gloomy season with lower profits. Analysts forecast a more than 7% decline in S&P 500 earnings from a year ago, according to FactSet.
This week also ushers in the Federal Reserve’s “blackout period” ahead of its July policy meeting. Traders anticipate a roughly 97% chance the central bank increases interest rates later this month, after pausing hikes in June, according to CME Group’s FedWatch tool.
Chart of the Day:
Europeans are facing a new economic reality, one they haven’t experienced in decades. They are becoming poorer. The French are eating less foie gras and drinking less red wine. Spaniards are stinting on olive oil. Finns are being urged to use saunas on windy days when energy is less expensive. Across Germany, meat and milk consumption has fallen to the lowest level in three decades and the once-booming market for organic food has tanked. Italy’s economic development minister, Adolfo Urso, convened a crisis meeting in May over prices for pasta, the country’s favorite staple, after they jumped by more than double the national inflation rate.
Adjusted for inflation and purchasing power, wages have declined by about 3% since 2019 in Germany, by 3.5% in Italy and Spain and by 6% in Greece. Real wages in the U.S. have increased by about 6% over the same period, according to OECD data.
What else is happening:
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