Commentary
Last week, America celebrated 57 years since we strapped three guys to a building-sized firecracker and yeeted them at the moon. The labor market saw that anniversary and said, “Hold my clipboard.”
- Initial jobless claims fell 22,000 to 187,000 for the week ending July 18, the lowest since September 1969. Forecasters had penciled in something north of 210,000. Continuing claims came in at 1.796 million for the week ending July 11, down another 2,000. So not only is almost nobody getting laid off, people who DO get laid off land a new desk before their “open to work” banner finishes uploading.
- The Conference Board’s Leading Economic Index slipped 0.2% in June to 99.1, dragged down by consumer expectations and building permits. Total damage for the first half of 2026: 0.3%, versus a 1.1% faceplant in the back half of 2025. The best part: the same week their own forward-looking index went DOWN, they raised their 2026 GDP forecast from 1.8% to 1.9%. That’s like checking your bank account, wincing, and then opening a food delivery app.
- New home sales rose 1.6% in June to a 628,000 annual rate, beating the 610,000 estimate, and the median price fell to $398,300. A new house in America now costs less than it did twelve months ago, which is a sentence I typed and then read four times, the way you reread a text from an ex at 11:40 pm on a Tuesday.
- The preliminary reading of S&P Global’s purchasing managers’ index—which surveys manufacturing and services—jumped to 53.6 in July, up from 51.9 in June. Services crushed it, employment rose for the first time in three months, and S&P Global says this points toward roughly 2% annualized growth versus the 1.2% Q2 was limping toward. But here’s the thing: July got a sugar rush from hosting a certain global soccer tournament AND the country’s 250th birthday party, so some of this glow is the economic equivalent of feeling incredible at your own wedding. Also, selling prices climbed at the fastest clip in nearly four years.
- The Chicago Fed National Activity Index improved to -0.02 in June from -0.19. Despite the name, it’s a national index of 85 indicators covering the whole economy; the Chicago Fed just publishes it. Activity is running a whisker below its long-term trend, which, after everything above, is almost soothing. It’s the one guy at the party drinking water, and honestly? Godspeed, water guy. Somebody has to remember where everyone’s keys are.
- The Fed meets Wednesday. Somewhere in the building, a 57-year low in jobless claims and a four-year high in what businesses are charging are sharing an elevator in silence.
Market summary
- Most major U.S. stock and bond indexes retreated for the week, with the Nasdaq leading the move lower. By contrast, many international markets advanced.
- It was a tough week for communication services and consumer discretionary names, while energy and utilities fared much better. Value stocks largely outperformed growth, widening their YTD lead. Small caps lagged, while mid caps were more resilient.
- Bond markets came under pressure as yields rose globally across the maturity curve.
- WTI crude oil climbed 8% during the week as tensions escalated in the Middle East. Gold rose, while copper—generally viewed as a rough measure of industrial activity—held steady.
Earnings review
- 2Q26 earnings have been generally strong. Analysts are expecting YoY earnings growth of 38.8%. With 132 companies in the S&P 500 reported, 85% beat earnings estimates—exceeding the 80% average from the prior four quarters.
- Companies are also beating both earnings and revenue estimates by a wider margin than usual: Earnings have averaged 8.8% higher than estimates (vs. prior four-quarter average of 7.5%), while earnings have been 2.6% above estimates (vs. 2.2%).