Happy Friday!
Will declining economic data and market volatility pull forward expected rate cuts? The first blind Barbie, and Dole bananas celebrate 125 years!
#1 – Weekly Market Recap
Another volatile week for stocks as mid-week optimism stemming from expected interest rate cuts gave way to pessimism from declining economic data and disappointing earnings results from Amazon.
Through Thursday’s close, the S&P 500, Dow Jones, and Nasdaq were down -0.2%, -0.6%, and -0.7% respectively. Stock markets are indicating lower this morning following an unexpected rise in the unemployment rate.
On Wednesday, the Nasdaq and S&P 500 each posted their best day in over 5 months following Meta’s earning report and a dovish Federal Reserve meeting. The Nasdaq rose an impressive +3% while the S&P 500 increased +1.6%.
Those gains were quickly erased, however, on Thursday after weak economic data was released, and fears of a recession started to emerge. Despite a late afternoon surge, the Nasdaq still declined -2.4% for the day and the S&P 500 dropped -1.4%.
The only constant of the week was the continued decline in Treasury bond yields as investors sought the safe haven of Treasury bonds (bond yields fall as bond prices rise). Thursday, the 10-Year Treasury bond yield fell more than -0.20% and closed below 4% for the first time since early February.
#2 – Fed Closer to Cutting?
At their July meeting Wednesday, the Federal Reserve held interest rates steady at 5.5%. This was the 8th consecutive meeting that the Federal Reserve declined to cut interest rates.
In Chairman Powell’s post-meeting press conference, he highlighted that inflation continues to remain elevated, but that progress is being made to bring levels down. Powell additionally stated that labor markets continue to decline, causing the risks associated with rising inflation and falling employment closer to balanced.
“We think what the data broadly show in the labor market is an ongoing, gradual normalization of labor market conditions… I don’t now think of the labor market in its current state as a likely source of significant inflationary pressures… So, I would not like to see material further cooling in the labor market.”
– Jerome Powell, FOMC post-meeting press conference (7/31/2024).
Powell stated that a rate cut at their next meeting in September was “on the table,” but he continued to hedge against directly confirming an interest rate cut at the September meeting by continuing to position the Federal Reserve as “data dependent.”
The stock and bond markets welcomed Chairman Powell’s statements Wednesday afternoon with the S&P 500 index rallying +1.6% and the yield on a 10-Year Treasury bond dropping to 4%, the lowest level since early February.
Much of the optimism following the Fed’s statement Wednesday, however, was derailed Thursday and Friday by weak economic data. The manufacturing sector fell further into contraction territory last month with a reading of 46.8 (versus a forecast for 48.8) while initial jobless claims rose to an eleven-month high of 249,000 (versus 235,000 estimate) and the unemployment rate rose to 4.3%, its highest level since late 2021.
The negative economic data heightened concerns that the economy has slowed too far. Investors sold stocks Thursday, pushing the S&P 500 index down -1.4% and the technology heavy Nasdaq down -2.3%.
Investors felt whip-sawed after the stock market rallied aggressively Wednesday, and then fell significantly Thursday. Many were left wondering if the Federal Reserve held rates too high for too long.
Source:Federal Reserve
#3 – First Blind Barbie
Mattel (MAT), toy maker of the popular Barbie, has released the first ever blind Barbie. This Barbie aims to be more inclusive and represent another section of society. She comes with a white and red cane and sunglasses to provide additional eye protection.
The American Foundation for the Blind (AFB) partnered with Mattel to create a doll that is both accessible and realistically depicts individuals with sight loss. The doll’s eye gaze has been designed to face “slightly up and out,” according to the AFB.
Barbie’s clothes have been designed using tactile fabric, such as a smooth, satiny blouse and a textured ruffled skirt. To make swapping clothes more accessible they have brightly colored easy to handle fasteners and the packaging features braille writing.
After falling sales and criticism for producing dolls that reinforced traditional beauty standards with unrealistic proportions, Mattel began producing a more inclusive toy line featuring different body types in 2016. Three years later, they announced the Barbie Fashionista line, which featured dolls with a prosthetic leg, hearing aids and wheelchairs.
“Barbie is all about joy – about discovering and understanding the world through play – and it’s wonderful to think that children with a vision impairment can now play with a Barbie that looks like them,” said Debbie Miller, Customer Advice and Support Director at Royal National Institute of Blind People.
Source: CNN
#4 – Dole BananaVersery
Why were the orange and apple all alone? Because the banana split! Dole has long been synonymous with bananas and this year they are celebrating 125 years of the iconic yellow fruit!
Bananas were first introduced to North America after the Civil War. It began in 1899 when Standard Fruit Company, the precursor to Dole Bananas, began importing bananas to the US from Honduras. As the nation’s appetite for bananas increased, New Orleans became a major center for banana imports from Central and South America.
Dole pioneered the safe and efficient transport of fruit across continents and supported farming communities and environmental initiatives. In the 1970s, Dole became a leader in organic farming, paving the way for sustainable production.
Dole continues to invest in cutting-edge research and development – including propagating disease-resistant banana varieties to ensure banana accessibility worldwide, precision agriculture practices to create sustainable banana cultivation, and next-generation packaging to minimize the environmental impact throughout the banana journey.
However, Dole didn’t just grow and deliver bananas, they helped make the fruit part of our daily life. They created recipes and marketing campaigns promoting the deliciousness of bananas and the health benefits of the fruit.
One legendary banana recipe is the flaming dessert, Bananas Foster. The signature dish dates to 1951, when Brennan’s, the iconic New Orleans restaurant, created a special dish using the beloved fruit for a celebration honoring family friend Richard Foster. The resulting masterpiece, created tableside, has been Brennan’s most popular menu item ever since. On any given night, if you walk down Royal Street in the French Quarter, you might catch the smell of caramelizing bananas, brown sugar and butter. YUM!
Click for Brennan’s Bananas Foster recipe – Brennan’s Recipe
Source: Dole