In the Markets – Week-Ending July 29
Newsletter: In the Markets – Week-Ending July 29
Crystal Brook Advisors
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United States: Consumer confidence was nearly unchanged at 97.3 in July from June’s 97.4 reading, indicating that post-Brexit fallout in the form of equity market volatility had little effect(1) U.S. economic growth sputtered this spring—growing a meager 1.2% in the second quarter—with cautious business investment largely offsetting more robust consumer spending.(2)
Europe: A cascade of terrorist attacks in Europe is driving away tourists at the height of the summer rush, casting a pall over hotel chains, airline companies and luxury retailers that are already grappling with Britain’s vote to leave the EU.(3) The European Central Bank’s extraordinarily easy monetary policy has led to an unusual kink in the path of bond yields, with the 10-year bond offering a higher yield than the bond maturing in 12 years.(4)
Asia: Japanese trade data beat expectations for June, but the figures continued to contract in the latest sign the world’s third largest economy has been hampered by weak demand. Exports fell 7.4%, while imports fell 18.8%.(5) The Japanese government and the European Commission are working together to connect their global positioning systems in a coordinated effort to clear a path for autonomous vehicles.(6)
Monday 07/25
• U.S. stocks slipped with investors remaining cautious ahead of policy decisions from two of the world’s major central bank (U.S. & Japan) this week.(7)
• Verizon is set to pay $4.8B to acquire Yahoo’s core Internet assets as well as real estate.(8)
Tuesday 07/26
• Oil prices sank to multi-month lows as growing concerns regarding oversupply continued to blight sentiment.(9)
• Anheuser-Busch InBev Raises Offer for SABMiller (from £44 to £45) in response to the sharp drop in the pound in the weeks since Britain voted to leave the European Union.(10)
Wednesday 07/27
• Apple shares soared 6.8% in extended trading after the company’s results beat expectations, soothing fears that iPhone demand had hit a wall.(11)
• Japan is considering issuing 50-year bonds for the first time—the latest sign that ultralow interest rates around the globe are encouraging superlong debt.(12)
Thursday 07/28
• Facebook topped $2 billion in quarterly profit, six months after crossing the billion-dollar mark for the first time. User numbers and ad dollars surged.(13)
• Since crude prices hit a year-high above $52 a barrel in June they have slipped almost 20%, leaving them on the cusp of a new bear market.(14)
Friday 07/29
• Retailers continue to lose e-commerce market share to Amazon (NASDAQ:AMZN) which posted better-than-expected results for Q2.(15)
• Apple may have blown its chance to launch a TV streaming service by placing harsh demands on networks, wanting to freeze the monthly per-viewer rate instead of following industry protocol of allowing yearly rate resets.(16)
Market Close
U.S. stocks ended the month on a high note, with the S&P 500 closing just a few points off a record level. All three main indexes posted solid monthly gains. For the benchmark S&P 500 and Dow industrials this was the fifth consecutive monthly advance. For the Nasdaq Composite, the monthly gain was the largest since March. The S&P 500 index SPX, +0.16% hit an intraday record level at 2,177.13, but closed off the highs. The index rose 3.54 points, or 0.2% to 2,173.60, finishing the week flat. Over the month, the index of large-cap stocks gained 3.6%. The Dow Jones Industrial Average DJIA, -0.13% slipped 24.11 points, 0.1% to 18,432.24 and posted a 0.8% loss over the week. Over the month, the blue-chip index gained 2.8%. Meanwhile, the Nasdaq Composite Index COMP, +0.14% ended the session up 7.15 points, or 0.1%, at 5,162.13, posting a 1.2% gain over the week and a 6.6% gain over the month.(17)
Contributor: Oscar Xia
Sources:
(1) Wells Fargo Economics Group, (2) Wall Street Journal, (3) Seeking Alpha, (4) Wall Street Journal, (5) Seeking Alpha, (6) Seeking Alpha, (7) Wall Street Journal, (8) Seeking Alpha, (9) Wall Street Journal, (10) New York Times, (11) Wall Street Journal, (12) Wall Street Journal, (13) Wall Street Journal, (14) Seeking Alpha, (15) Seeking Alpha, (16) Seeking Alpha, (17) MarketWatch
