Markets were under pressure this week, ultimately ending in the green. Will interest rates remain elevated and possibly go even higher in Q3?
Monday S&P 500 0.02% | NASDAQ 0.18%
Monday started with volatile trading as markets sought to get a footing. Durable goods orders (Jun) were lower primarily due to sluggishness in transportation while other data suggests businesses were replenishing inventories. Ultimately, markets closed flat as a pause in military strikes in Iran allowed oil markets to catch their breath.
Tuesday S&P 500 0.21% | NASDAQ 0.22%
Consumer confidence measures (July) showed a slight crack in the consumer. Technology stocks were dealt the biggest blow on the day while consumer defensive stocks were seen as a safe-haven. The Federal Open Market Committee (FOMC) begins their tow-day meeting and will announce policy direction on Wednesday.
Wednesday S&P 500 1.52% | NASDAQ 1.74%
The Federal Reserve kept interest rates steady which led to a selling frenzy on limited guidance provided during their presser. Markets have grown increasingly concerned with business investment with a hawkish leaning Federal Reserve. This means there is a growing feeling that rates could be hiked in the near-term.
Thursday S&P 500 1.66% | NASDAQ 2.78%
Stocks staged a dramatic rebound, with Microsoft (MSFT) carrying the load after Wednesday’s volatile trading session. Inflation figures revealed very little change in June, lending to positive sentiment on direction on prices. Gross Domestic Product (GDP) for 2nd quarter fell below 2% but has fended off talks of any sort of contraction.
Friday S&P 500 0.70% | NASDAQ 1.00%
Another positive day for equities to finish off the week and a strong finish for the month of July. Amazon (AMZN) reported and shareholders liked what they saw supporting strong flows into consumer discretionary stocks. The 10-year Treasury yield (mortgage proxy) rose to 4.75% which is the highest level in over 18 months.
Conclusion S&P 500 1.05% | NASDAQ 1.59%
Markets swung in dramatic fashion this week due to a combination of factors. Several big names reported earnings and reversed the prior week’s losses in specific sectors including Communication stocks and Consumer Discretionary. Ad revenue spending picked up meaningfully in Q2 due to seasonal travel but will be closely watched ahead of mid-terms. This trend, of course, is not representative of buying activity in all portfolios due to individual risk tolerances. The last week of July helped equities end the month mixed. The S&P 500 fell .12%, the Nasdaq dropped 2.75%, and the Dow Jones Industrial rose .30% for the month. In a month full of earnings, and other world news, it was certainly a pulse-check on the health of equities going into August.
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