” Jesus said, “I came into this world for judgment, in order that those who do not see will see and those who do see will become blind.”
Some of the Pharisees who were with him heard these things and asked him, “We aren’t blind too, are we?”
“If you were blind,” Jesus told them, “you wouldn’t have sin. But now that you say, ‘We see,’ your sin remains.”
John 9:39-41 (CSB)
John 9 tells the story of Jesus healing the man born blind. Had Jesus simply pronounced the blind man healed, this miracle might have escaped unnoticed. Instead, he gave him sight through an elaborate process of making and then smearing mud across his eyes — an act that violated the Sabbath rules against work of any kind!
His actions caused quite a stir in the city. The Pharisees (the religious authorities of the time) interrogated the man (and even his parents) to determine who was responsible for this violation. How could any man claim to be from God and yet violate their rules for the Sabbath?
When Jesus returned to the scene of his “crime,” they questioned him themselves. But they didn’t like what he implied. How could they be spiritually blind when they were the religious leaders and foremost authorities of Scripture in the nation?
The Pharisees were spiritually blind because they were spiritually proud.
It’s a trap we can all fall into. Like the Pharisees, we can know, say and do all the seemingly right Christian things in the seemingly right Christian places and become blinded to what Christ has to say to us by our perceived self-righteousness.
This week, take a moment to evaluate your spiritual sight. Are there areas in your life where pride may be blinding your perception of Christ?
Across the Markets
Equities were up for the week, with the S&P 500® hitting new all-time highs. Gains remain relatively narrow across equities, and the equal-weighted version of the S&P 500® lagged the market cap-weighted version by 234 basis points. Growth-oriented stocks significantly outperformed value for the week, with the Russell 1000 Growth and Value indexes posting a 3.7% and -0.4% return, respectively. Expectations for lower interest rates, fed by signs of weakening growth and easing inflation pressures, seemed to remain a significant factor in favoring growth stocks. Small-cap stocks also lagged their large-cap counterparts for the week, and the Russell 2000 index was down -1.0%.
Interest rates were generally lower for the week, and the U.S. Treasury yield curve steepened modestly but remained inverted. The 10-year Treasury yield fell by nine basis points to reach 4.28%, and the 2-year Treasury yield was down by 12 basis points for the week, closing Friday at 4.60%. Markets are now pricing in more than a 70% likelihood that the Federal Reserve could begin interest rate cuts in September.
Oil prices climbed for the fourth week to the highest level in over two months, with U.S. crude trading above $83 per barrel on Friday afternoon. Reports showed a decline in U.S. oil inventory, confirming recent forecasts expecting tighter supply throughout the summer.
European Central Bank (ECB) President Christine Lagarde spoke more hawkishly at the central bank’s annual retreat in Portugal. She said that Europe is “still facing several uncertainties regarding future inflation, especially in terms of how the nexus of profits, wages and productivity will evolve and whether the economy will be hit by new supply-side shocks” and added that “It will take time for us to gather sufficient data to be certain that the risks of above-target inflation have passed.” Minutes from the ECB’s June meeting also showed that some members opposed the first rate cut since 2019, citing a surprising upside in wage growth and stickier-than-expected inflation.
In Japan, a weaker Yen, which acts as a tailwind to the country’s export-oriented sectors, helped propel indexes to new all-time highs.
In the Economy
Nonfarm payrolls increased by 206K in June, outpacing economist expectations of 189.5K, but downward revisions to the prior two months dampened the headline gain. The revisions showed that employment growth averaged 176K per month over the second quarter, down from a 267K average over the first quarter. The unemployment rate also ticked up a tenth to 4.1% in June, the highest since late 2021 and above the market expectation of 4.0%.
Job openings data released earlier in the week also signaled some cooling in the labor market. In May, there were 1.2 available jobs for each unemployed person, down from a peak of 2.0 in March 2022 and now roughly in line with the pre-pandemic norm.
On Monday, the Institute for Supply Management (ISM) posted a 48.5 reading for manufacturing activity, the lowest since February. However, a sharp downturn in the ISM’s gauge for service sector activity was more surprising, with the measure falling into contraction territory (a reading below 50) from 53.8 in May to 48.8 in June, its lowest level since soon after the start of the pandemic lockdowns in early 2020.
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The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe and is a subset of the Russell 3000 Index, representing approximately 10% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The index is completely reconstituted annually to ensure that larger stocks do not distort the performance and characteristics of the actual small-cap opportunity set. Frank Russell Company ("Russell") is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. "Russell®" is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings and/or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell's express written consent. Russell does not promote, sponsor or endorse the content of this communication. Index used with permission. It is not possible to invest directly in an index.
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