Hello everyone, as we rounded out the month of July we are now heading into the month of August which has not been a good month for stocks historically. Get me take below in this week’s round-up.
WEEKLY SOUND BITES:
- Indexes were mixed but ended the week lower. It was the busiest week of the earnings season, with 177 of the S&P 500 companies expected to report second-quarter results. And especially for the big cap technology stocks with FB, AAPL, MSFT, GOOGL, FB and AMZN all releasing earnings. A decline in AMZN shares weighed on the consumer discretionary sector following news Thursday evening that the online retailer missed consensus second-quarter revenue expectations.
- The Commerce Department reported its advance estimate that US GDP increased at an annualized rate of 6.5% in Q2, well shy of consensus estimates of around 8.5%. Nevertheless, it was the second-fastest pace of growth since 2003 and left the economy larger than its pre-pandemic peak. Many analysts pointed to lingering supply chain problems as preventing even stronger growth. June durable goods orders also fell well short of expectations, as did core capital goods orders and shipments, though there were some upward revisions to older data. Weekly jobless claims fell less than expected, and continuing claims rose a bit. July consumer confidence surprised to the upside, and inflation expectations eased slightly. Personal spending also rose more than expected in June (1.0%), rebounding from a slight contraction in May. The Labor Department’s measure of employment costs rose 0.7% in the second quarter, a slowdown from the first quarter and below estimates of 0.9% gain.
- Reflecting the downward growth and inflation surprises, the yield on the benchmark 10-year U.S. Treasury note ended lower for the week. Market participants viewed the official statement from the Federal Open Market Committee’s (FOMC’s) July 27–28 meeting as somewhat hawkish. Fed Chair Jerome “Power Ranger Boom Boom” Powell underscored that the committee’s marker of “substantial further progress” has not yet been reached.
- Optimism engendered by strong corporate earnings was offset by concerns about the spread of the delta variant of the coronavirus. The eurozone economy bounced back from recession in the second quarter, growing by a faster-than-expected 2% relative to the first three months of 2021. The year-over-year growth rate of 13.7% also topped prominent estimates. Euro area inflation accelerated to 2.2% in July from 1.9% in June, lifted by higher energy prices. However, excluding food and fuel prices, the inflation rate held steady at 0.9%.
- Mainland Chinese stocks slumped after a regulatory overhaul of the for-profit education sector unveiled July 24 proved to be much tougher than investors had expected, and fears of heightened government oversight spilled into Chinese technology, health care, and property stocks. The large-cap CSI 300 Index sank 5.5% in its worst weekly drop since February, according to Bloomberg. For July, the benchmark shed 7.9%, its biggest monthly drop since October 2018. In Hong Kong, the Hang Seng Index declined 1.4% for the week after the benchmark index shed more than 8.0% on Monday and Tuesday on record-high volumes.
Enjoy This Week’s Round-Up;
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
