What happened last week…
The DJIA (0.72%) extended its winning streak to three consecutive weeks while the S&P 500 (-1.97%) and NASDAQ (-3.65%) were both in the red. Both the S&P 500 and NASDAQ had their worst weeks since April and while the S&P 500 remains positive on the month (0.82%), the tech-heavy NASDAQ has dipped into negative territory (-0.03%). The DJIA is up 2.99% this month and on Tuesday had its best trading day (1.85%) since June 2023.
Federal Reserve Chairman Jerome Powell again hinted at a potential near-term interest rate reduction when he spoke at the Economic Club of Washington D.C. Powell acknowledged, “If you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%.”
Chip stocks saw declines after a report from Bloomberg said the Biden administration could tighten China’s access to semiconductor technology. The U.S. could impose the “foreign direct product rule,” which would restrict foreign-made products that use American technology. Furthermore, a comment by former President Donald Trump stating Taiwan, a big producer of semiconductors, should pay the U.S. for defense protection also factored in the decline of chip stocks.
Alphabet (GOOG) is reportedly in talks to purchase cybersecurity firm Wiz for $23 billion. Wiz was founded in 2020 and its most recent round of funding valued it at $12 billion. The company also contemplated an IPO earlier this year. Should the deal finalize, it would be the largest ever acquisition for Alphabet.
Happening this week…
The following companies report earnings this week: NUE, VZ, DHR, GOOG, GPC, KMB, MCO, TSLA, TXN, UPS, V, CMG, GD, NEE, NOW, TMO, WM, ABBV, DOV, RTX.
On Tuesday, existing home sales for June are expected to decrease to 4.00 million from 4.11 million, which was the third straight monthly decline. On Wednesday, new home sales for June are expected to increase to 640,000 from 619,000, which was the lowest reading in six months.
On Thursday, the GDP growth rate (first estimate) for Q2 2024 is expected to increase to 2.0% from 1.4%, which was a decrease from the Q4 2023 reading of 3.4%. The current figure is the lowest growth since the contractions seen during the Covid pandemic.
Thanks for reading!
- The Rockline Team!