Month: July 2020

Technology stocks drove the broad indexes higher on Monday. The Nasdaq climbed 1.67 percent, the Russell 2000 Index 1.16 percent, the S&P 500 Index 0.74 percent and the Dow Jones Industrial Average 0.43 percent.

SPDR Technology (XLK) advanced 1.58 percent, SPDR Materials (XLB) 1.45 percent and SPDR Real Estate (XLRE) 1.18 percent.

The Federal Reserve’s Federal Open Market Committee (FOMC) meets this week. Chairman Powell will hold a press conference following the policy statement. Investors expect no change in Fed policy from the prior meeting.

Second quarter gross domestic product will be announced on Thursday. Forecasts range from negative 35 percent to negative 15 percent.

Durable goods orders rose 7.3 percent in June, better than forecasted. Core capital goods orders increased 3.3 percent.

The Conference Board’s consumer confidence index will be out on Tuesday. Analysts foresee a slight dip to 95.5 in July. The University of Michigan’s consumer sentiment index is out on Friday. A small decline is expected as well. Economists predict initial claims for unemployment will rise to 1.51 million.

The 10-year Treasury yield rose to 0.61 percent on Monday. High yield bonds gained on the day thanks to falling credit risk. iShares iBoxx High Yield Corporate Bond (HYG) increased 0.22 percent.

iShares MSCI Emerging Markets (EEM) gained 1.55 percent and iShares MSCI EAFE (EFA) 1.31 percent.

This will be a significant week for corporate earnings. Tuesday brings Advanced Micro Devices (AMD), Visa (V), Pfizer (PFE), Amgen (AMGN), McDonald’s (MCD), Starbucks (SBUX), 3M (MMM), eBay (EBAY), Mondelez (MDLZ) and Sherwin-Williams (SHW).

Boeing (BA), Facebook (FB), Shopify (SHOP), Paypal (PYPL), Qualcomm (QCOM) and General Electric (GE) headline Wednesday reports, along with Anthem (ANTM), General Motors (GM) O’Reilly Automotive (ORLY) and Teladoc (TDOC).

On Thursday, Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Comcast (CMCSA), Mastercard (MA), Proctor & Gamble (PG), Gilead Sciences (GILD), Newmont Mining (NEM), Ford (F). Eli Lilly (LLY) and Cigna (CI) delivering earnings.

Exxon Mobil (XOM), Chevron (CVX), Merck (MRK), AbbVie (ABBV), Caterpillar (CAT) and Dominion Energy (D) close out the week.

The S&P 500 Index declined 0.28 percent this week, the Russell 2000 Index 0.39 percent this week. The Dow Jones Industrial Average fell 0.76 percent and the Nasdaq 1.33 percent.

SPDR Energy (XLE) advanced 2.21 percent on the week, aided by crude oil holding steady above $40 per barrel. SPDR Financial (XLF) added 1.29 percent, SPDR Consumer Discretionary (XLY) 1.29 percent and SPDR Consumer Staples (XLP) 0.89 percent.

Existing home sales climbed from an annualized pace of 3.91 million in May to 4.72 million in June, slightly missing expectations. New homes sales also jumped from May and beat expectations, hitting an annualized pace of 776,000. iShares U.S. Home Construction (ITB) rallied 3.96 percent on the week.

Flash PMIs from Markit showed the manufacturing and service sectors improved in July. This indicates that while some states have reversed openings in the face of rising coronavirus cases, the impact on the economy may be limited.

Initial claims for unemployment rose to 1.42 million for the week ending July 18, in line with expectations. Continuing claims declined at the state level, from 17.3 million to 16.2 million, but the number of people claiming federal and state benefits only decreased by 0.2 million, to 31.8 million. Anecdotal evidence from businesses says many workers may be voluntarily unemployed. Congress is currently haggling over a reduction to the extra federal benefits.

The 10-year Treasury yield fell to 0.59 percent this week. Long-term government bonds performed well as iShares 20+ Year Treasury (TLT) gained 1.81 percent. iShares iBoxx High Yield Corporate Bond (HYG) rallied 1.32 percent as credit risk continues to fall.

Earnings reports were mixed. Among the firms delivering solid results were International Business Machines (IBM), Coca-Cola (KO) and Microsoft (MSFT). Shares of Coca-Coal (KO) climbed 3.59 percent and IBM rose 0.54 percent. MSFT dipped 0.77 percent because it was dragged down by the broader tech sector. Intel (INTC) slumped 16.24 percent on Friday after it said its 7 nanometer chips would be delayed until 2022 or 2023. Competitor Advanced Micro Devices (AMD) popped 16.50 percent as it is already manufacturing 7 nm chips.

Tesla (TSLA) also weighed on tech funds. It delivered positive earnings of more than $100 million, but this took selling $1 billion worth of government environmental credits. Shares finished the week down 5.66 percent.

Technology drove the indexes higher on Monday; Amazon (AMZN) jumped 7.97 percent. The Nasdaq increased 2.51 percent on the day, while the S&P 500 gained 0.84 percent. The Dow Jones Industrial Average increased 0.03 percent. The Russell 2000 Index fell 0.36 percent.

SPDR Technology (XLK) climbed 2.56 percent on Monday, SPDR Consumer Discretionary (XLY) 1.60 percent and SPDR Communication Services (XLC) 1.20 percent. All other sectors were down on the day.

June existing home sales are out on Wednesday. Analysts are looking for an annualized sales pace of 4.9 million, up 1 million from May’s pace.

Friday brings the July flash manufacturing PMIs. The Markit manufacturing PMI is expected to cross into expansion.

The U.S. Dollar Index slipped 0.15 percent as investors looked forward to more stimulus in Europe. iShares MSCI Emerging Markets (EEM) climbed 1.29 percent and iShares MSCI EAFE (EFA) 0.49 percent.

International Business Machines (IBM) kicked off earnings this week with a strong report. Cloud computing helped the firm beat both earnings and revenue estimates. Shares climbed more than 5 percent in after-hours trading.

On Tuesday, Intuitive Surgical (ISRG), Coca-Cola (KO), United Continental (UAL), Texas Instruments (TXN), Snap Inc. (SNAP), Lockheed Martin (LMT), Philip Morris International (PM), Capital One Financial (COF), Synchrony Financial (SYF) and Ameritrade (AMTD) are among the bigger names reporting.

Wednesday will be an important day for technology earnings. After the close, investors will hear from Tesla (TSLA) and Microsoft (MSFT). Other firms delivering results include Thermo Fisher Scientific (TMO), Align Technology (ALGN), Chipotle Mexican Grill (CMG), Biogen (BIIB), CSX Corp (CSX) and Las Vegas Sands (LVS).

Union Pacific (UNP), Intel (INTC), American Airlines (AAL), AT&T (T), Danaher (DHR), Twitter (TWTR) and Royal Caribbean Cruises (RCL) headline Thursday earnings.

Verizon (VZ), Honeywell (HON), American Express (AXP), Schlumberger (SLB), Ventas (VTR) and Goodyear Tire (GT) close out the week.