Stocks turned in a mixed performance last week as investors struggled with headlines suggesting that the Fed was unlikely to soon ease up on its current monetary tightening policy.
The Dow Jones Industrial Average slipped 0.13%, while the Standard & Poor’s 500 rose 0.36%. The Nasdaq Composite index picked up 2.15% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.23%. 1,2,3
Ahead of Friday’s employment report, stocks were generally higher, highlighted by a Wednesday rally triggered by fresh earnings surprises and a better-than-expected economic report. The rally was especially notable because it occurred when multiple Fed officials said that the fight against inflation hadn’t ended, perhaps throwing cold water on the idea that the Fed might pivot due to weakening economic activity and the prospect of cooling inflation.
Aside from this single day of enthusiasm, markets were a bit jittery, especially as investors monitored Speaker of the House Pelosi’s visit to Taiwan. A robust employment report on Friday reinforced the idea that the Fed would likely stay the course on monetary tightening, resulting in a mixed market for the week.
The U.S economy added 528,000 jobs in July, doubling the consensus expectation of 258,000. The unemployment rate ticked lower, falling from 3.6% to 3.5%. Coincident with this job creation was strong wage growth, as average hourly earnings rose 0.5% in July and 5.2% from a year ago. 4
Leisure and hospitality, professional and business services, and healthcare lead the way in reported job gains, as seen in most sectors of the economy. Even sectors such as construction, particularly vulnerable to rising interest rates, saw job gains. The labor force participation rate moved slightly lower, slipping to 62.1%--its lowest level this year. 5
This Week: Key Economic Data
Wednesday: Consumer Price Index (CPI). Institute for Supply Management (ISM) Services Index. Factory Orders.
Thursday: Jobless Claims. Producer Price Index (PPI).
Friday: Consumer Sentiment.
Source: Econoday, August 5, 2022
This Week: Companies Reporting Earnings
Monday: Dominion Energy, Inc. (D), Tyson Foods, Inc. (TSN).
Tuesday: Emerson Electric Co. (EMR).
Wednesday: The Walt Disney Company (DIS).
Thursday: Illumina, Inc. (ILMN).
Source: Zacks, August 5, 2022
The IRS May Send You One of Two Notices If Your Filed Returns Don’t Match Their Records
Have you wondered what happens if the information on your tax return doesn’t match the IRS records? The IRS mails out two notices, CP2100 and CP2100A, to banks, credit unions, businesses, and payers that may have made a mistake on their return.
The IRS mails these notices out twice a year, in September/October and April of the following year. Payers may receive a notice if their return is missing a Taxpayer Identification number, has an incorrect name, or both. The notices also tell payers that they are responsible for backup withholding.
* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov6
Footnotes and Sources
2. The Wall Street Journal, August 5, 2022
3. The Wall Street Journal, August 5, 2022
4. CNBC, August 5, 2022
5. CNBC, August 5, 2022
6. IRS.gov, May 2, 2022
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Weekly Market Insights: Mixed Week For Markets; Jobs On The Rise
August 08, 2022