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The Market Glance for July 2: Markets Thrived in Q2 Despite Looming Trade Wars and Political Mayhem

While most dividend investors will likely take a hiatus this week, thanks to lack of corporate earnings releases, macro investors will be busy reviewing the growth in key industries and keeping an eye on major economic indicators to predict how economic growth fared in Q2 and there will be plenty of data releases to keep them busy.

There were plenty of issues that kept investors concerned about the possibility of a slowing economic growth in Q2. Some policy decisions from the White House and the Fed’s decision to abruptly hike interest rates kept investors on their toes last quarter. The possibility of an all-out trade war with key allies and trading partners could have easily derailed the U.S. economy last quarter.

However, a strong labor market coupled with some sensible growth in manufacturing and decent improvements in export orders kept the economy on the right track. In fact, we might see this week’s employment situation report to end Q2 with one of the lowest unemployment rates in history.

If we look around the world, no other major central bank is even remotely considering hiking interest rates. However, the U.S. economy is weathering the gradual rate hikes from the Fed and most economic indicators are still delivering some impressive numbers, which is causing the Dollar to rapidly appreciate.

To sum up, the trade balance just might get impacted by slowing exports due to the appreciating Dollar this week, but there are plenty of good reasons why the market should continue to trade on a bullish note.

Check out last week’s Market Glance here in which investors focused on the Q1’18 GDP growth rate.

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