Equities extended their recent positive run this week receiving support from better-than-expected corporate earnings reports. Friday’s payrolls report from the Labor Department showed employers added 528,000 nonfarm jobs in July, more than double consensus expectations. Following the strong July gains, total nonfarm employment in the US has now returned to its pre-pandemic level. Supply remains a problem, with half of independent businesses reporting at least one job opening that is hard to fill. Suggesting the strength of the employment market may be difficult to maintain and some market volatility could be expected.
The release of the US and Chinese Consumer Price Index (CPI) data this week will be one to watch, particularly since the Federal Reserve (Fed) is expected to continue raising rates in the months to come. US Q2 Earnings Season also continues this week with AIG and Disney due to report this week.
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