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Thursday brought more negative news from the jobs market: unemployment insurance claims for the week ending July 27 were up by 14,000 from the previous week to 249,000. Stepping back from last week's weak data, chief investment officers and top strategists say the market is overreacting, and they're using this as a buying opportunity. Related storiesSimilarly, the manufacturing data is not as foreshadowing as it seems on the surface. "But the ISM manufacturing data can be a leading indicator of S&P earnings, particularly the new order number." "If you look at non-US stocks and you look at their valuations, they're trading at about 13 times earnings," Calcagni said.
Persons: Dow, we've, Philip Straehl, Morningstar, Goldman Sachs, Jan Hatzius, Alicia Levine, Levine, it's, what's, Morningstar's Straehl, Simeon Hyman, Hyman, Donald Calcagni's, Calcagni Organizations: Service, Nasdaq, Institute for Supply, Business, BNY, Big Tech, Mercer Advisors Locations: Americas
Central bankers said they had more confidence inflation was back on track to 2%. Markets are pricing in a 100% chance of a rate cut in September, per the CME FedWatch tool. AdvertisementUS stocks surged on Wednesday, driven by a rally in the tech sector and dovish comments from the Federal Reserve. The second quarter's inflation readings have added to our confidence, and more good data would further strengthen that confidence," Fed Chair Powell said in prepared remarks. Markets are now pricing in with certainty that the Fed will cut rates in September, according to the CME FedWatch tool.
Persons: , Powell, Philip Straehl, Morgan Stanley Organizations: Fed, Service, Federal Reserve, Nasdaq, Morningstar Wealth, AMD, Nvidia
But the sell-offs have put both asset classes in a better position to succeed for the long-term, Straehl said in a recent note. While communication services stocks have largely sold off this year, the sector is now the most attractive in the market, Straehl said. The Vanguard Communication Services ETF (VOX) provides exposure to the communications services sector. The second trade Straehl said will deliver 7% real returns over the next 10 years is emerging market stocks. The stocks are in a more favorable place valuation-wise than developed market stocks, Straehl said.
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