Weekly Wrap-Up
During the week, U.S. markets experienced notable volatility, driven by geopolitical tensions, earnings reports, and economic data. While the Dow Jones Industrial Average (DJIA) saw gains, the S&P 500 and Nasdaq Composite faced declines due to pressures on tech stocks.
Key Drivers:
Earnings Reports:
Strong earnings from companies like 3M Co. and Bristol-Myers Squibb helped lift investor sentiment.
Alphabet and Tesla's disappointing results contributed to midweek slumps, with the Nasdaq experiencing its largest drop since October 2022.
Economic Data:
The Personal Consumption Expenditures (PCE) price index rose modestly, supporting expectations for a Federal Reserve rate cut.
Lower-than-expected inflation figures added to the optimism about potential rate cuts, bolstering broader market confidence.
Sector Performance:
Small-cap stocks and cyclical sectors outperformed, driven by rotation from high-valued tech stocks to other market areas.
The "Magnificent 7" tech stocks faced a correction, reflecting a shift in investor focus.
Geopolitical Tensions: Heightened U.S.-China trade conflicts raised concerns over supply chain disruptions, impacting investor sentiment. These tensions added to the market's volatility, influencing trading patterns and investment decisions.
Economic Indicators:
Inflation: The core PCE index's modest rise reinforced expectations of a potential Fed rate cut in September.
Employment Data: The upcoming July payrolls report and Federal Reserve meeting are anticipated to be significant drivers of market movement in the following week.
Stocks on the Move:
3M Co.: Surged 24% after exceeding earnings expectations and raising its full-year forecast.
Aon: Jumped 7.7% on strong quarterly results.
Bristol-Myers Squibb: Rose over 11% due to positive earnings and a raised forecast.
Coinbase Global: Increased nearly 5%, benefiting from a rise in bitcoin prices.
Colgate-Palmolive: Gained 3% following better-than-expected results and an improved yearly outlook.
Dexcom: Dropped 41% after missing revenue estimates and lowering its forecast.
Crude Oil Prices: Oil prices fell nearly 4% to around $77 per barrel, marking the lowest level in about seven weeks amid expectations of sagging global demand.
Volatility Index: The Cboe Volatility Index (VIX) saw a brief spike on Thursday, reaching levels 55% higher than its July 12 close before retreating by Friday, reflecting fluctuating investor sentiment.
International Market Performance:
Europe: Mixed performance with Germany up 1.1% and Switzerland up 1.1%, while Japan fell 3.8%.
Emerging Markets: Declines in Brazil (-2.0%), China (-2.3%), and Korea (-2.7%) contrasted with gains in India (1.8%).
Fixed Income Market:
U.S. Treasury Yields: The 10-year yield rose to 4.20%, up 32 basis points YTD.
Corporate Bonds: High-yield bonds saw modest gains, while municipal bonds remained stable.
Looking Ahead: Investors are preparing for significant upcoming events, including earnings reports from major companies like McDonald's, Microsoft, Apple, Amazon, and Intel. Additionally, the Federal Reserve meeting and the July payrolls report are expected to provide further direction for market movements.
Volatility Snapshot For The Past Week
ETF Snapshot For The Past Week
