U.S. indices were up by low single digits in July, with the Nasdaq doing best as tech stocks continued to rally. International markets also did well, but fixed income was weaker. This market performance reflected the underlying economy. Strong job creation pushed consumer confidence up significantly, supporting income and spending growth. Inflation continued its decline, although the Fed raised rates again as expected.

There was a lot more data this week than last—and all of it was good. Everything we are seeing suggests that the economy is still growing, despite the headlines and fears. While there are certainly risks out there, the data is showing a resilience that no one expected, and that is a good sign for the future.

With the Fed’s regular meeting scheduled to conclude today, there has been a tremendous amount of commentary around what the Fed is going to do, what it should do, what it might do, and so forth. The consensus is that the Fed will raise rates 25 bps and then signal—something—going forward.

This will be a short post for a couple of reasons. First, there isn’t a ton of news to talk about and nothing really notable. Second, I want to head up to Maine for the weekend to eat lobster rolls and hopefully get some sun. Here’s hoping.

My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Market Risk Update. Thanks for the assist, Sam! Let’s take a closer look.

There was one word that mattered this week: inflation. The consumer and producer data reports were released, and they both said the same thing. Inflation is down, significantly. That news took interest rates down and the stock market up. It was a good week from economic and investment standpoints. To understand why, let’s dig in a bit.

My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam! Let’s take a closer look.

June was a strong month and closed out a generally solid quarter, especially for U.S. stocks. The U.S. indices were up significantly for the month, and both the S&P 500 and the Nasdaq showed positive gains for the quarter, although the Dow lagged. International markets also did well in June but ended the quarter flat. Fixed income, on the other hand, was much weaker for both the month and quarter.

Financial markets were clearly in a risk-on mode, which benefited riskier investments like tech stocks at the expense of more boring ones.

U.S. stocks were up for June and the quarter while gains in international markets last month left them flat for the quarter. Fixed income didn’t fare as well. Market performance reflected positive economic news, with continued strong job creation, income and spending growth, and improving consumer confidence. But while inflation is down, it may not stay that way.

Unlike last week, when there really wasn’t much news, we did get quite a bit of data this week. And it was all positive.