Alpha Picks Weekly Market Recap: FOMC Meeting and Trade Deadline Converge with Economic Data

This week's market recap from Alpha Picks discusses the convergence of economic data releases with the FOMC meeting and trade deadline. The article highlights the perfect storm of financial news and the impact it has on the market. Steven Cress, VP of Quantitative Strategy, shares his thoughts on the current market conditions and the potential implications for investors.

This week brought a perfect storm of financial news, with economic data releases converging with the highly anticipated FOMC meeting and the trade deadline. Steven Cress, VP of Quantitative Strategy at Alpha Picks, shared his insights on the current market conditions and the potential implications for investors.

Economic data releases dominated the week, with notable highlights including a strong Q2 GDP report that showed annualized growth of 3.0%, surpassing forecasts. The report highlighted resilient consumer spending despite ongoing concerns over tariffs and inflation. The Federal Reserve maintained its wait-and-see approach, keeping interest rates unchanged at 4.25–4.50% on Wednesday. However, Friday's ominous unemployment report has traders pricing in the probability of a 25bps rate cut for the September 17th FOMC meeting, with an 81% probability [1].

The week also saw a seismic shift in the trade landscape with President Trump’s newly announced tariffs, which led to a sharp decline in major stock indexes. The S&P 500 and the Nasdaq fell by nearly 2% and around 2.0% respectively, marking their steepest single-day losses in months. Investors rushed into safe havens, with Treasury yields dropping, gold rallying, and the US dollar weakening. The administration imposed sweeping reciprocal tariffs on dozens of countries, with an additional 40% surcharge for tariff evasion and a targeted hike to 35% on Canadian imports [1].

Market volatility was further intensified by a disappointing jobs report, which pointed to a cooling labor market. The JOLTs report showed a decrease in job openings, and the unemployment rate ticked up more than expected to 4.2%. Inflation concerns were also heightened with the Core PCE Index increasing 0.3% month-over-month in June, slightly higher than May's revised +0.2% [1].

Despite the challenging market conditions, the Alpha Picks portfolio continued to outperform. Seventeen out of 38 Alpha Picks have reported earnings, with 88% beating earnings estimates and exceeding revenue expectations. Notable standouts include Celestica (CLS), which soared following its earnings announcement, delivering a double-beat [1].

In the cryptocurrency market, Arthur Hayes sold $13.3 million worth of ETH and ENA tokens, causing notable fluctuations within hours. These large-scale transactions have contributed to increased volatility and market uncertainty. The sales coincided with a 5% drop in Ethereum prices, highlighting the influence of trader activity on market dynamics [2].

The week's economic data and market volatility serve as reminders for investors to focus on stocks with strong fundamentals. The Alpha Picks portfolio offers a data-driven approach to smarter investing, leveraging Seeking Alpha's powerful quantitative stock-picking system to deliver two data-driven stock picks each month. Despite the uncertainty, the resilient GDP report and strong earnings from tech giants like Apple (AAPL) and Microsoft (MSFT) underscore the potential for growth in certain sectors [1].

References:
[1] https://seekingalpha.com/article/4807856-alpha-picks-weekly-market-recap
[2] https://en.coinotag.com/arthur-hayes-13-3m-eth-sale-may-influence-market-volatility-and-price-movements/