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Hope you are doing well and that you enjoyed your Independence Day. The NASDAQ and the S&P 500 pushed their record levels higher again, posting weekly total returns of 3.5% and 2.0%, respectively. For the NASDAQ, it was the tenth positive week out of the past eleven. The Dow gained 0.7% and remained 1.6% below its record set in mid-May. Since this week we celebrate the 4th, I have broken down this week’s update using some lesser known facts about the Founding Fathers.

George Washington’s birthday changed when he was in his 20s

Washington’s date of birth was changed when England changed their calendar to include leap years. Like Washington’s birthday the market reaction to what is a good jobs report is changing. Bad news in the labor market has become good news for stocks. The market rally was fueled by a higher unemployment rate. The jobs number was mixed. June’s gain of 206,000 jobs exceeded economists’ consensus forecast for around 190,000, so still strong. However what the market keyed on was a rise in unemployment to 4.1% that left the jobless rate at the highest level since November 2021. Moreover, April’s and May’s initially reported jobs growth figures were revised downward by a total of 111,000, adding to the recent data indicating a modest slowdown in jobs growth. The jobs report appeared to strengthen expectations of a potential U.S. Federal Reserve rate cut later this year.

Three founding fathers died on Independence Day (John Adams, Thomas Jefferson, James Monroe)

Adams and Jefferson both passed on the 50th anniversary in 1826. Similarly, on the day of an important jobs report both crypto currency and bond yields fell. Bitcoin fell below $54,000 at one point on Friday, the lowest level in more than four months. As recently as June 5, Bitcoin was trading above $71,000. Yields of government bonds fell. The yield of the 10-year U.S. Treasury was about 4.28% at Friday’s close, down from 4.37% at the end of the previous week. Yields of 2- and 30-year notes also declined.

Three men at the 1787 Constitutional Convention refused to sign the Constitution. (George Mason, Edmund Randolph, and Elbridge Gerry)

Political leaders sometimes fail to see the long term implications of their decisions. The current administration has been short sighted, draining our oil reserves to control oil prices. Oil prices climbed for the fourth week in a row to the highest level in more than two months, The latest gain came as a weekly report showed a decline in U.S. oil inventory. Confirming recent forecasts from analysts who expect tight supplies throughout the summer. A significant spike in oil prices over the summer would not be helpful to incumbent politicians seeking re-election.

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