Markets grew for the week for the first time in a month. Is it a reason to celebrate or a breather in the pullback?
Monday S&P 500 0.87% | NASDAQ 1.11%
Nine major companies reported earnings, with two missing expectations. Equities jumped to open the week. Outside of earnings data there was not much to support the rally. It was likely a jump on three consecutive weeks of down market, creating better by opportunities.
Tuesday S&P 500 1.20% | NASDAQ 1.59%
35 major companies reported earnings, with five missing expectations. Housing data came in better than expected. The heavy earnings data drove markets higher on Tuesday, pun intended. GM (GM) and Tesla (TSLA) were among reporters that helped propel markets.
Wednesday S&P 500 0.02% | NASDAQ 0.10%
40 major companies reported earnings, with six missing expectations. Core durable goods orders came in lighter than expected. Strong earnings data was counter-balanced by higher rate expectations. This left markets fairly unchanged.
Thursday S&P 500 0.46% | NASDAQ 0.64%
60 major companies reported earnings, with 13 missing expectations. GDP grew at a much slower pace than expected(1.6% vs 2.5%). Unemployment data continued to show strength. GDP and forward guidance from Meta (META) spooked markets early. They managed to climb halfway out of the hole that was dug as the earnings flowed in throughout the day.
Friday S&P 500 1.02% | NASDAQ 2.03%
13 major companies reported earnings, with five missing expectations. Consumer sentiment softened in April. Core Personal Consumption Expenditures (PCE) held steady at 2.8% in March. This is the Federal Reserve Board’s (FRB) preferred gauge of inflation. Between PCE data and earnings from Alphabet (GOOG) and Microsoft (MSFT) markets surged on the day.
Conclusion S&P 500 2.67% | NASDAQ 4.23%
The markets experienced a strong bounce back this last week in comparison to the last three weeks. Do not be fooled. Markets have a way to go to recapture highs as the growth did not even recover from the prior week. This indicates that there is room for markets to continue the run up as earnings season wears on. There are major hurdles this coming week with the FRB meeting, Jobs data, and Apple (AAPL) reports earnings.
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This last week was like a pendulum as the markets swung back and forth. Should this continue?
Monday
Markets slipped on Monday with the S&P 500 shifting down less than 0.2%. Manufacturing data disappointed, although the number still indicated expansion. The miss set a sell mood for the day.
Tuesday
The S&P 500 rose 0.8% on Tuesday as a broad-based rally grabbed hold. All major indices rose on the day. Factory orders, a good indication of future consumer demand, rose more than expected in June.
Wednesday
Markets retreated from the Tuesday rally. ADP employment data, often used as a predictor for the Friday jobs report, missed expectations. A foreshadowing of concern over the employment market dominated the trading day.
Thursday
The gyrations of the market continued on Thursday as the market regained the losses felt on Wednesday. This came as initial jobless claims dipped back below 400K, landing at 385K.
Friday
Although mild, markets ended the week on an up note. The S&P 500 gained about 0.10% on the day. The data was strong as jobs Friday delivered. Unemployment fell to 5.4% and 943K jobs were added in July. While strong it was not enough to elicit a strong market reaction as concerns over a hot re-opening persist.
Conclusion
For the week the S&P 500 gained 0.93%. Jobs were in focus this week, as was continued concerns over the spread of the Delta Variant. This coming week is set up to have a continued focus on jobs data and consumer data.
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Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.
Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.