The final few trading days of July were busy. Among the most consequential reports were the ADP and BLS nonfarm payroll figures in addition to the Fed’s July interest rate decision.
On Wednesday, the ADP announced that the economy added 104,000 jobs compared to an expected 77,000. In addition, the job report from June was revised to a loss of 24,000 positions. Also on Wednesday, the Fed decided to keep interest rates in a range from 4.25 percent to 4.5 percent.
Finally on Wednesday, advanced gross domestic product (GDP) figures for the past three months were released. It indicated the economy grew 3 percent during the previous quarter compared to an expected increase of 2.5 percent.
On Thursday, the Core PCE Price Index came out and revealed that prices for most goods increased by .3 percent compared to an expected .2 percent. This is the Fed’s preferred inflation gauge, and combined with July’s inflation report finding that inflation increased to 2.7 percent on an annual basis, it’s easy to see why the Fed stood pat. Unemployment claims data was also made public that day and found that 218,000 people made requests for benefits compared to an expected 222,000.
On Friday, the BLS nonfarm payroll report came out and found that 73,000 jobs were added during the month of July. This was below the 106,000 positions analysts believed had been added during that period. It’s worth noting that the June figure was revised downward to just 14,000. The BLS also revised May’s figure downward to 19,000.
The unemployment rate ticked up to 4.2 percent while monthly average hourly earnings rose by .3 percent, and each of those figures was in line with expectations. Later Friday morning, the ISM Manufacturing PMI came in at 48 compared to an expected 39.5.
At the close of trading Friday, the S&P 500 stood at 6,238, which was a loss of 155 points or 2.44 percent over the last five trading days. On Tuesday, the market made a high of 6,402 before remaining flat most of the week. However, on Friday, the index took a nosedive and made a low of 6,214.
The Dow was also off this week, closing down 2.77 percent to finish at 43,588. This was a loss of over 1,200 points for the market that made its weekly high on Monday and weekly low on Friday. The weekly high was 44,932 while the weekly low was 43,440.
Finally, the Nasdaq followed the other two major indexes lower and closed out the week at 20,650. This was a loss of 2.43 percent or 515 points for the tech-heavy market. On Thursday, the index made a high of 21,394 before reversing and making a weekly low of 20,569 on Friday.
In international news, the Bank of Canada announced that the country’s key interest rate would remain at 2.75 percent. On Thursday night, the Bank of Japan announced that the nation would also retain the status quo by keeping its interest rate at just below .50 percent.
The upcoming week will surely be another interesting one as tariffs are set to take effect for many countries. The ISM Services PMI will be released on Tuesday while unemployment claim numbers are set to be released Thursday as usual. International traders will want to keep an eye out for Great Britain’s next rate decision, which is scheduled to be released on Thursday morning.