Weekly Market Update — July 22, 2023

  • It was another great week for the large-cap U.S. equity markets, as Friday’s market close saw the DJIA advance for its 10th consecutive day, its longest rally in almost 6 years
  • The DJIA advanced 2.1%, handily outpacing the smaller-cap Russell 2000 (1.5%) and the S&P 500 (+0.7%)
  • Tech stocks struggled relative to the other major indices, as NASDAQ declined 0.6%, weighed down by Netflix
  • This week saw some big gains in the banking sector, as Bank of America, Northern Trust, Western Alliance and U.S. Bancorp enjoyed healthy gains after positive earnings reports
  • There was not any real impetus to this week’s market movements, other than Wall Street beginning to feel more confident that the Fed might pull off a soft landing after all and that we’re close to done with Fed rate hikes
  • Weekly initial jobless claims came in at the lowest level (228,000) since Mid-May
  • The retail sales report showed total sales declining 0.2%
  • Total housing starts declined 8.0% month-over-month and building permits decreased 3.7% month-over-month
  • Of the 11 S&P 500 sectors, Health Care (+3.5%) and Energy (+3.5%) led the way as Communication Services sector (-3.0%) brought up the rear
  • The 2-year Treasury yield rose to 4.85% and the 10-year Treasury yield rose three basis points to 3.85%
  • WTI Crude rose 2% this week, ending the week at $76.91/barrel
Weekly Market Performance

Close Week YTD
DJIA 35,228 +2.1% +6.3%
S&P 500 4,536 +0.7% +18.1%
NASDAQ 14,033 -0.6% +34.1%
Russell 2000 1,960 +1.5% +11.3%
MSCI EAFE 2,177 -0.6% +12.0%
*Bond Index 2,094.69 -0.57% +2.15%
10–Year Treasury Yield 3.85% +0.03% -0.1%

*Source: Bonds represented by the Bloomberg Barclays US Aggregate Bond TR USD. This chart is for illustrative purposes only and does not represent the performance of any specific security. Past performance cannot guarantee future results.

Equities Mixed This Week as Soft Landing Looks Possible

Stocks had a pretty good week, as three of the four major U.S. equity indexes advanced on hopes that a soft landing engineered by the Federal Reserve was becoming more possible. And the signs reinforcing the notion of a soft landing were in jobless claims, housing and industrial production.

The tech-heavy NASDAQ declined slightly this week, weighed down by Netflix mid-week. And not surprisingly, Value stocks outperformed the Growth names by a slight margin.

Big picture, equities have rebounded nicely off the October bear-market lows, gaining back most of that 25%+ loss between January and October of last year. Further, equities continued to move higher, and now the S&P 500 is within 6% of its all-time high. It’s also interesting to note that small-caps have rallied 7% in less than three weeks.

There was a lot of economic data to digest this week, including Retail Sales (up slightly), Industrial Production (down slightly) and Housing Starts (down slightly), plus the following:

  • Initial claims for the week ending July 15 decreased by 9,000 to 228,000 That is the lowest level of initial claims since mid-May
  • Continuing jobless claims for the week ending July 8 increased by 33,000 to 1.754 million
  • The four-week moving average for initial claims decreased by 9,250 to 237,500
  • The four-week moving average for continuing claims decreased by 1,750 to 1,731,500
  • The Conference Board Leading Economic Index for the U.S. declined by 0.7% in June 2023 to 106.1 (2016=100), following a decline of 0.6% in May
  • The LEI is down 4.2% over the six-month period between December 2022 and June 2023—a steeper rate of decline than its 3.8% contraction over the previous six months (June to December 2022).


Retail Sales Up

The U.S. Census Bureau reported that total retail sales in June increased 0.2% month-over-month, which was generally weaker than expected.

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  • Excluding autos, June retail sales also increased a weaker-than-expected 0.2%
  • Motor vehicle and parts dealer sales increased 0.3% month-over-month following a 1.5% increase in May
  • Gasoline station sales declined 1.4% month-over-month after declining 2.1% in May
  • Building material and garden equipment and supplies dealer sales dropped 1.2% month-over-month after increasing 1.4% in May
  • Food and beverage store sales decreased 0.7% month-over-month after being unchanged in May

Housing Starts Decline in June

Total housing starts declined 8.0% month-over-month in June to a seasonally adjusted annual rate of 1.434 million, with single-family starts down in all regions except the West (+4.6%). In addition, building permits decreased 3.7% month-over-month, with permits for single-family units flat to positive in all regions.


In addition:

  • The change in single-unit starts by region: Northeast (-11.9%); Midwest (-19.6%); South (-7.3%); and West (+4.6%).
  • The change in single-unit permits by region: Northeast (0.0%); Midwest (+4.7%); South (+2.8%); and West (0.0%).
  • Multi-unit starts were down 9.9% month-over-month and multi-unit permits were down 12.8% month-over-month.
  • The number of units under construction at the end of the period increased 0.1% month-over-month to a seasonally adjusted annual rate of 1.682 million.

Industrial Production Drops Slightly in June But is Up Slightly for 2Q2023

On Tuesday, the Federal Reserve reported that Industrial Production declined 0.5% in June for a second consecutive month but advanced 0.7% at an annual rate for the second quarter as a whole. Manufacturing output moved down 0.3% in June but rose 1.5% in the second quarter. In June, the indexes for mining and utilities fell 0.2% and 2.6%, respectively. At 102.2% of its 2017 average, total industrial production in June was 0.4% below its year-earlier level. Capacity utilization stepped down to 78.9% in June, a rate that is 0.8% point below its long-run (1972-2022) average.


Market Groups

Most major market groups posted declines in June. The index for consumer durables fell 2.7%, led by notable decreases in the output of appliances, furniture, and carpeting (3.8%) and of automotive products (3.6%). The decrease of 0.9% in the index for consumer nondurables reflected declines in clothing (2.1%), energy (1.8%), and food and tobacco (1.3%). Within business equipment, an increase in the index for information processing was offset by decreases in the indexes for transit and for industrial and other. Defense and space equipment posted the only gain of 1.5% or greater among the market groups.

Industry Groups

Manufacturing output moved down 0.3% in June. For the second quarter, factory output moved up 1.5% at an annual rate, buttressed by a second-quarter jump of 36.7% in the production of motor vehicles and parts during the quarter. In June, the indexes for nondurable manufacturing and durable manufacturing fell 0.6% and 0.1%, respectively; the index for other manufacturing (publishing and logging) edged down 0.2%. Within nondurables, only chemicals recorded an increase, whereas decreases of at least 1% were recorded by most other industries. Notable declines occurred in the indexes for printing and support (2.5%) and petroleum and coal products (1.6%). The index for durable manufacturing, on the other hand, posted more mixed results in June, with declines in the output of motor vehicles and parts (3.0%) and of nonmetallic mineral products (1.2%) being mostly offset by gains elsewhere.

Mining output inched down 0.2% in June and declined 1.1% at an annual rate in the second quarter. Within mining, a drop of 2.8% in the index for oil and gas well drilling in June was nearly offset by a gain in oil and gas extraction. The output of utilities fell 2.6% in June and 2.0% in the second quarter.

Capacity utilization for manufacturing edged down to 78.0% in June, a rate that is 0.2% point below its long-run (1972-2022) average. The operating rate for mining ticked down 0.1% point to 91.6%, and the operating rate for utilities dropped 2.1% points to 68.5%. The rate for mining was 5.2% points above its long-run average, while the rate for utilities remained well below its long-run average.


federalreserve.gov conference-board.orgcensus.gov msci.comfidelity.comnasdaq.comwsj.commorningstar.comcensus.gov ;


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