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The S&P 500 kicked off the second half of 2022 with a strong week of gains amid signs the U.S. labor market remains strong.
On Friday, the Labor Department reported the U.S. economy added 372,000 jobs in June, beating economist estimates of 250,000 jobs. The unemployment rate remained steady at 3.6%, and hourly wages were up 5.1% from a year ago.
On Wednesday, the Federal Open Market Committee released its June meeting minutes, and the Fed’s language suggests it will likely opt for another 0.75% interest rate hike in July. The Fed said its rate hikes could “slow the pace of economic growth for a time,” but warned that inflation “could become entrenched” if it does not take appropriately aggressive policy measures.
On Tuesday, the yield on 10-year U.S. Treasury bonds dropped below the yield on 2-year Treasury bonds. This type of yield curve inversion has historically been a reliable indicator that a U.S. recession is coming or has already begun.
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Video game retailer GameStop announced a four-to-one stock split on Wednesday and then fired its CFO Mike Recupero on Thursday and said it is making additional staff cuts as part of its aggressive turnaround plan. Chairman and popular activist investor Ryan Cohen was reportedly responsible for Recupero’s ouster.
Jeans ripping
Shares of denim jeans maker Levi Strauss traded higher on Friday after the company reported impressive second-quarter earnings numbers and raised its dividend by 20%.
In the week ahead, second-quarter earnings season kicks off with reports from Delta Air Lines on Wednesday, JPMorgan Chase on Thursday and Citigroup and Wells Fargo on Friday.
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Analysts are expecting 4.1% earnings growth from S&P 500 companies in the second quarter, according to FactSet.
Economic numbers
In the wake of the positive jobs report, Wall Street will get more key economic updates on Wednesday when the U.S. Labor Department releases its June Consumer Price Index reading and on Friday when the National Bureau of Statistics of China releases its China GDP growth estimate for the second quarter.
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Benzinga is a financial news and data company headquartered in Detroit.
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