Weekly Market Update — July 15, 2023

  • U.S. equity markets jumped this week, driven by better-than expected inflation data hitting consumers (CPI) and producers (PPI)
  • The CPI data was the driver mid-week, released before markets opened on Wednesday and showing a smaller-than-expected 0.2% increase in total CPI and a 0.2% increase in core CPI
  • The smaller-caps outperformed the other U.S. equity indices, rising 3.6%, although it was up closer to 5% until it pulled back on Friday
  • NASDAQ (+3.3%) outpaced the DJIA (+2.3%) and the S&P 500 (+2.4%) as the tech names continue to run hot and now stand at almost +35% YTD
  • All 11 S&P 500 sectors recorded gains this week and the worst performer was Energy (+0.6%) whereas the best performer was Communication Services (+3.4%)
  • On the heels of CPI data being released, Treasury yields went south and stock prices went north
  • The 2-year Treasury yield ended the week declining by 21 basis points to 4.73% while the 10-year Treasury declined 23 basis points to 3.82%, well under last week’s 4.00% threshold
  • The fed funds futures market has priced in a 96.1% probability of a 25-basis points rate hike at the July meeting, but is betting that another rate hike at the September meeting is a measly 15%
  • The U.S. Dollar Index dropped 2.4% this week to 99.96
  • WTI Crude moved up almost $2/barrel and ended the week at $75.26/barrel
Weekly Market Performance

Close Week YTD
DJIA 34,509 +2.3% +4.1%
S&P 500 4,505 +2.4% +17.3%
NASDAQ 14,114 +3.3% +34.9%
Russell 2000 1,931 +3.6% +9.6%
MSCI EAFE 2,189 +5.1% +12.6%
*Bond Index 2,104.40 +1.9% +2.72%
10–Year Treasury Yield 3.82% -0.23% -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.

Stocks and equities Jump This Week on Softening Inflation Numbers

Stocks had a very good week, driven first by positive CPI (consumer inflation) data on Wednesday and then driven further by arguably better PPI (producer inflation) data on Thursday. When the week was over, the S&P 500 ended less than 7% from its all-time high and NASDAQ is about 13% below its all-time high.

The triggering event of the week was Wednesday’s release of Consumer Price Index inflation data showing that both headline and core (excluding food and energy prices) inflation rose 0.2% in June. In addition, the annual increase in headline inflation slowed to 3.0%, its slowest pace since March 2021, while core inflation slowed to 4.8%, the slowest since October 2021.

Then on Thursday, another triggering — if not reinforcing event — was the release of the Producer Price Index inflation data showing that headline producer prices rose only 0.1% over the year ended in June. Further, core producer prices rose 2.4% over the period, which is really close to the Fed’s overall inflation target of 2.0% and their slowest pace since January 2021.

In addition to inflation numbers (discussed later), Wall Street had to digest a lot of additional economic data, including that:

  • The four-week moving average for initial claims decreased by 6,750 to 246,750;
  • The four-week moving average for continuing claims decreased by 10,750 to 1,735,250;
  • The total number of continued weeks claimed for benefits in all programs was 1,764,005, an increase of 64,431 from the previous week; and
  • In the same week a year ago, there were 1,397,976 weekly claims filed for benefits in all programs.


  • Consumer credit increased by $7.3b in May following a downwardly revised $20.3b in April;
  • Revolving credit increased by $8.5b to $1.254 trillion;
  • Consumer credit increased at a seasonally adjusted annual rate of 1.8% in May; and
  • Revolving credit increased at an annual rate of 8.2%, while nonrevolving credit decreased at an annual rate of 0.4%.


  • The preliminary July University of Michigan Consumer Sentiment Index ended at 72.6 versus the final reading of 64.4 for June;
  • In the same period a year ago, the index stood at 51.5;
  • The Current Economic Conditions Index increased to 77.5 from 69.0. In the same period a year ago, the index stood at 58.1;
  • The Index of Consumer Expectations increased to 69.4 from 61.5. In the same period a year ago, the index stood at 47.3;
  • Year-ahead inflation expectations increased to 3.4% from 3.3%;
  • Five-year inflation expectations increased to 3.1% from 3.0%. They have held in the 2.9-3.1% range in 23 of the last 24 months; and
  • The July reading for the Consumer Sentiment Index is the highest since September 2021


Inflation Cools to 3.0% Over the Past 12-Months

On Wednesday before markets opened, the U.S. Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers rose 0.2% in June on a seasonally adjusted basis, after increasing 0.1% in May. Over the last 12 months, the all items index increased 3.0% before seasonal adjustment.



  • The index for shelter was the largest contributor to the monthly all items increase, accounting for over 70% of the increase, with the index for motor vehicle insurance also contributing.
  • The food index increased 0.1% in June after increasing 0.2% the previous month.
  • The index for food at home was unchanged over the month.
  • The index for food away from home rose 0.4% in June.
  • The energy index rose 0.6% in June as the major energy component indexes were mixed.
  • The index for all items less food and energy rose 0.2% in June.
  • This was the smallest 1-month increase in that index since August 2021.
  • Indexes which increased in June include shelter, motor vehicle insurance, apparel, recreation, and personal care.
  • The indexes for airline fares, communication, used cars and trucks, and household furnishings and operations were among those that decreased over the month.

Over the Past 12-Months

  • The all items index increased 3.0% for the 12 months ending June.
  • This was the smallest 12-month increase since the period ending March 2021.
  • The all items less food and energy index rose 4.8% over the last 12 months.
  • The energy index decreased 16.7% for the 12 months ending June.
  • The food index increased 5.7% over the last year.

Inflation Since 1965


Producer Price Index Slows Too

Then on Thursday, the U.S. Bureau of Labor Statistics reported that the Producer Price Index for final demand increased 0.1% in June. In addition, Final demand prices declined 0.4% in May and edged up 0.1% in April. On an unadjusted basis, the index for final demand advanced 0.1% for the 12 months ended in June.


Final Demand Prices

  • In June, the increase in final demand prices can be traced to a 0.2% rise in the index for final demand services. Prices for final demand goods were unchanged.
  • The index for final demand less foods, energy, and trade services moved up 0.1% in June after no change in May.
  • For the 12 months ended in June, prices for final demand less foods, energy, and trade services advanced 2.6%.

Final Demand Services

  • The index for final demand services increased 0.2% in June, the same as in May.
  • Leading the June advance, prices for final demand services less trade, transportation, and warehousing moved up 0.3%. Margins for final demand trade services rose 0.2%.
  • In contrast, the index for final demand transportation and warehousing services decreased 0.9%.

In Addition:

  • Within the index for final demand goods in June, prices for gasoline rose 3.4%.
  • The indexes for electric power; beef and veal; chicken eggs; and medical, surgical, and personal aid devices also moved higher.
  • In contrast, prices for iron and steel scrap dropped 10.8%.
  • The indexes for diesel fuel, oilseeds, industrial chemicals, and residual fuels also decreased.

Earnings Season Kicks Off

On Friday, research firm FactSet reported that for Q2023 (and with just 6% of S&P 500 companies having reported actual results):

  • 80% of S&P 500 companies have reported a positive EPS surprise and 63% of S&P 500 companies have reported a positive revenue surprise.
  • The blended earnings decline for the S&P 500 is -7.1%. If -7.1% is the actual decline for the quarter, it will mark the largest earnings decline reported by the index since Q2 2020 (-31.6%).
  • On June 30, the estimated earnings decline for Q2 2023 was -7.0%.
  • Seven sectors are reporting lower earnings today (compared to June 30) due to negative EPS surprises or downward revisions to EPS estimates.
  • 68 S&P 500 companies have issued negative EPS guidance and 45 S&P 500 companies have issued positive EPS guidance.


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