Wednesday, July 3, 2019

Market Update 07-03-19 - Markets at New High


The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indexes all closed at record highs today. We’ve had several weak jobs reports showing that the rate of job growth is slowing. Market participants believe that the slowing pace of job creation gives the Federal Reserve reason to cut interest rates when they meet later this month. Lower interest rates can reduce borrowing costs for businesses and individuals. In theory, this can lead to economic growth. Lowering interest rates is one of the tools the Federal Reserve has used in the past to encourage economic activity and pull the economy out of a recession. It is unclear if lower interest rates will have the same effect when the economy is not in a recession. If the Federal Reserve decides not to cut interest rates as expected, you could see markets reverse course and give back much of the recent gains.