What happened last week…
On Wednesday, the S&P 500 (-2.31%) and NASDAQ (-3.64%) had their worst trading sessions since 2022. The DJIA declined -1.25% that day. For July, the DJIA (3.76%) remains positive while the S&P 500 (-0.03%) and tech-heavy NASDAQ (-2.11%) are in the red. Year-to-date performances are as follows: DJIA (7.69%), S&P 500 (14.45%), NASDAQ (15.63%).
The GDP growth rate (first estimate) for Q2 2024 beat expectations (2.0%) as it increased to 2.8% from the Q1 2024 rate of 1.4%, which was a decrease from the Q4 2023 reading of 3.4%. The Q1 2024 figure is the lowest growth since the contractions seen during the Covid pandemic.
Existing home sales for June missed expectations (4.00 million) as it decreased to 3.89 million from 4.11 million, making it the fourth straight monthly decline and the lowest figure this year. New home sales for June missed expectations (640,000) as it decreased to 617,000 from the upwardly revised 621,000 (from 619,000). It is the lowest reading in seven months.
According to FactSet, as of July 26, 41% of S&P 500 companies have reported earnings with 78% having a positive EPS surprise and 60% having a positive revenue surprise. The blended earnings for the S&P 500 is 9.8%, which would be the highest rate since Q4 2021 (31.4%). The blended revenue for the index is 5.0%, which would be the 15th straight quarter of growth.
Happeneing this week…
The following companies report earnings this week: MCD, AEP, ITW, MRK, MSFT, PEG, PG, PSX, SPGI, ADP, LRCX, MA, META, AAPL, AMZN, MCHP, SO, XOM.
On Wednesday, the Federal Open Market Committee is expected to keep interest rates at 5.25% to 5.50%, which would be the eighth consecutive meeting of unchanged rates. According to the CME FedWatch Tool, as of July 26, the Fed could cut interest rates by 25 basis points after their meeting in September.
On Wednesday, the ADP employment change may decrease to 140,000 from 150,000. On Friday, the unemployment rate is expected to remain at 4.1%, nonfarm payrolls are forecasted to decrease to 185,000 from 206,000, and average hourly earnings month-over-month are expected to remain at 0.3%.
On Thursday, the manufacturing PMI for July is expected to increase to 48.8 from 48.5, which was the third straight monthly decline after the March figure snapped a streak of 16 straight readings below 50.
Thanks for reading!
- The Rockline Team