Decoding Last Week’s Market Movements: The Fed, Jobs Report & Tech (Weekly Cheat Sheet)

The stock market took investors on a wild ride last week, raising more than just eyebrows. With major U.S. indexes recording losses, market enthusiasts and experts are left to wonder: What exactly triggered these movements? Is the booming start of 2023 beginning to cool off?

Jobs Report: The Mixed Signals

We began the week with an air of optimism as the U.S. added 187,000 jobs in July, resulting in a drop in unemployment to 3.5%. Surely, this signified economic strength, right?

However, as the week progressed, an unexpected downturn took the wind out of the market’s sails. Despite the promising employment figures, a slowdown in hiring signaled a cooling economy. This comes as a surprise, especially when juxtaposed against the rising wages. The key question here is: Is this a temporary blip, or is the U.S. economy genuinely cooling down?

Credit Downgrade Shakes Confidence

Adding fuel to the fire, Fitch downgraded the U.S. credit rating earlier in the week, sending shockwaves through the stock and bond markets alike. While some experts believe this won’t impact the fundamental drivers of the economy and markets, the downgrade surely spooked investors. Recalling the 2011 experience with a similar downgrade, investors had sought safety in government bonds and the U.S. dollar as havens. Could we see a similar trend emerge this time?

Tech: The Highs and Lows

Tech continued its dominating performance in the stock market. Amazon shares surged by approximately 8% after announcing strong earnings. On the other hand, Apple experienced a 5% dip due to declining revenues. Tech stocks, including giants like Microsoft, Oracle, and Palantir Technologies, have recently seen accelerated gains, signifying the sector’s importance.

Other Key Takeaways

  • Utilities Suffer: Utilities faced significant losses with the S&P 500 sector plunging over 4%.
  • Agricultural Impact: Wheat prices surged owing to reports of Ukrainian sea drones attacking a Russian Black Sea port, a pivotal hub for oil and grain exports.
  • Bonds & Treasury: Bonds are under pressure, with the 10-year Treasury yield hitting a new high for the year.
  • Retailer’s Possible Benefit: With federal student loan payments restarting after a three-year hiatus, retailers like Dollar General and Dollar Tree might see a boost as consumers tighten their purse strings.

Looking Ahead: What’s in Store?

Despite the week’s tumultuous events, it’s essential to keep a broader perspective. The S&P 500 rose by an impressive 19% in the first seven months of 2023, with the Nasdaq Composite seeing a staggering surge of 44% by the end of July. The bull market, fueled by better-than-expected mid-year earnings and the Federal Reserve’s effective inflation control, has erased recession fears for now.

However, a word of caution. The recent market events, combined with the potential “Wall of Worry” lingering on the horizon, suggest that investors should brace themselves for possible increased volatility in the second half of the year.

In conclusion, while the week presented challenges, the fundamental growth and inflation metrics provide a solid foundation for stocks to maintain an uptrend. The main task for investors? Keep an eye on unfolding events, adapt strategies accordingly, and perhaps most importantly, hold onto their hats in what promises to be an eventful remainder of 2023.


  • Thursday, August 10: CPI (MoM) (July)
  • Friday, August 11: PPI (MoM) (July)

Wall Street’s Wobbly Stance

Last week, Wall Street’s primary indicators slipped noticeably, with the S&P 500 and Nasdaq witnessing their steepest falls since March. As we head into this week, a whopping 84% of S&P 500 entities have unveiled their earnings. Preliminary data hints at a 5.2% dip in earnings per share year-on-year. If accurate, this would be the third straight quarter of dwindling profits. Adding to the skepticism, many question the sustainability of the tech-driven rally that’s largely buoyed the market this year. As earnings revelations wind down, investors are pinning hopes on giants like Disney (DIS) to reignite confidence.

Inflation Under the Microscope

Inflation figures will undoubtedly be the talk of the town this week. Investors are eager to discern if the pricing strains have relaxed in July. Financial analysts project a 3.3% annual hike in headline inflation, a notch above June’s 3.0%. While this might seem like a renewed surge, it’s crucial to acknowledge the expected fluctuations in the forthcoming months, even though the overarching trend hints at deflation. Thursday’s revelation could offer crucial pointers regarding the Federal Reserve’s next move, possibly hinting at an interest rate shift in their September conclave.

UK’s Financial Forecast

Turning our attention to international waters, global economic insights will be gleaned from this week’s overseas data. Specifically, all eyes will be on the U.K.’s Q2 GDP figures released on Friday. Experts anticipate only a slight uptick, suggesting a mostly flatlining economy. With inflation circling 7.9% and interest rates soaring to a 15-year peak, this blend of tepid growth and spiraling inflation might strain businesses and households alike.

Europe and the Dragon’s Data

The Eurozone and China will also be in the spotlight with crucial economic updates scheduled. Germany’s Monday update on industrial productivity is forecasted to underscore a consistent drop in worldwide demand, potentially shadowing prospects for Europe’s powerhouse. China’s Tuesday bulletin on July’s inflation rate is expected to cement existing deflationary worries. With China’s growth stalling post its pandemic resurgence, a skeptical investing community might be keen on seeing fresh stimulatory actions from Beijing.


Last week in the bond market, significant movements and events provided potential investment opportunities. The U.S. Department of the Treasury signaled a surge in anticipated borrowing for the upcoming months, largely influenced by various economic components.

Despite some uncertainties, the bond market itself appeared robust. With expectations of short-term rate hikes by the Federal Reserve, investors are being nudged towards considering longer-dated maturities, which not only offer higher yields but also serve as a buffer against market volatility. From a sectoral perspective, while longer-duration instruments like Treasuries faced negative returns, high-yield corporates, preferreds, senior loans, and emerging markets were on the positive side, signaling areas for potential investment.

A notable event was the U.S. credit rating downgrade by Fitch Ratings, causing a notable surge in U.S. Treasury yields and pointing towards a reshaping market landscape. With the Federal Reserve leaving the door open for more rate hikes, the bond investment climate remains one where astute timing is paramount. A dip in the economy might lead to rate reductions, potentially igniting a bond price rally.

Lastly, a promising takeaway for investors is the present bond market’s attractive yields, especially in longer-term bonds, marking higher yields than those seen over the past decade. Given this backdrop, potential investors should maintain vigilance over the evolving economic scenario and central bank stances to inform their decisions.


Oil & Energy

Oil prices marked their sixth consecutive week of growth, largely influenced by Russia and Saudi Arabia’s extended production cuts. The Saudi Kingdom not only reaffirmed its commitment to slash production by 1 million barrels daily till September but hinted at prolonging and possibly deepening this cut through the fall. Russia echoed this sentiment, with Deputy Prime Minister Alexander Novak announcing a cut of 300,000 barrels daily for September, building on their previous declaration of a 500,000 barrels per day cut in August. The plunging U.S. crude stockpiles also played a role in pushing Brent closer to its three-month peak. Currently, Brent stands just over $85 a barrel, a tad higher than the $82.2 for its U.S. counterpart, WTI.

Precious Metals & Gold

Gold witnessed a rise in its price on Friday, a move sparked by the marginally underwhelming U.S. employment data which nudged both the dollar and Treasury yields downward. This provided a breather for the yellow metal, which had been bracing for its most challenging week in six years. Gold is currently hovering around $1945 per ounce on the LME, while silver and palladium are priced at $23.7 and $1251 per ounce, respectively.


Over the past week, the cryptocurrency market has seen various fluctuations. Bitcoin was priced at $28,992.40, reflecting a 7-day change of 1.19%. Ethereum followed with a price of $1,826.46 and a 7-day increase of 1.95%. While other cryptocurrencies like Tether, Binance Coin, XRP, USD Coin, and Dogecoin also saw varying degrees of price changes, XRP notably surged by 12.48% over the week. One significant event that impacted the crypto world was Ripple’s court victory against the SEC.

Following the court’s clarification that XRP is a security for institutional sales but not for the general public, the currency rallied by 75%, and Bitcoin marked a year-high of $31,809, a 90.8% gain year-to-date. Additionally, misleading information about the SEC instructing Coinbase to delist certain cryptocurrencies led to a 2% drop in market capitalization to $1.16 trillion. This drop was further impacted by a $47 million hack on Curve Finance and an increase in the U.S. dollar index, which inversely affected cryptocurrency prices.

Bitcoin also faced pressure from a U.S. stock sell-off, declining about 10% and touching its lowest point since July 2021 at $32,860.91. This was compounded by the Federal Reserve’s decision to hike interest rates in response to inflation, and the TerraUSD stablecoin momentarily losing its dollar peg, contributing to market uncertainty.

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