Stocks moved to the rhythm of earnings season last week, initially rising on positive earnings surprises and faltering later in the week on key earnings disappointments.
The Dow Jones Industrial Average rose 2.08%, while the Standard & Poor’s 500 added 0.69%. The Nasdaq Composite Index slumped 0.57% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.32%.1,2,3
Earnings in Focus
Entering its first big week of the second quarter earnings season, solid reports from the nation’s big banks rewarded investor optimism, sparking a rally that continued into mid-week. An announcement by a mega-cap tech company of a new AI subscription plan, and stabilizing deposits at several regional banks, further fed investor enthusiasm.
Disappointing earnings from two big-tech names dragged market indices lower on Thursday, with the largest losses in the Nasdaq composite. Despite the reversal, 20 stocks in the S&P 500 touched 52-week highs on Thursday, with 11 reaching all-time highs.4
Stocks closed flat to end an otherwise mixed week.
Housing Hits a Bump
June housing reports reminded investors that any emerging housing recovery remains shaky. After a massive 21.7% jump in housing starts in May, new home construction tumbled 8.0% in June, with building permits (an indicator of future home construction) dropping 3.7%.5
Sales of existing homes were also lower in June, declining by 3.3%, owing to a persistently low inventory level. This was the slowest pace since January. Year-over-year sales were lower by 18.9%. One reason for low inventory is that homeowners have been reluctant to sell homes on which many have a historically low mortgage rate and face buying a new home at elevated prices with a much higher mortgage interest rate.6
This Week: Key Economic Data
Monday: Purchasing Managers’ Index (PMI) Composite Flash.
Tuesday: Consumer Confidence.
Wednesday: FOMC Announcement. New Home Sales.
Thursday: Gross Domestic Product. Durable Goods Orders. Jobless Claims.
Friday: Personal Income and Outlays.
Source: Econoday, July 21, 2023
This Week: Companies Reporting Earnings
Tuesday: Microsoft Corporation (MSFT), General Electric Company (GE), Verizon Communications, Inc. (VZ), Visa, Inc. (V), Alphabet, Inc. (GOOGL), NXP Semiconductors, N.V. (NXPI), General Motors Company (GM), Archer Daniels Midland Company (ADM), 3M Company (MMM), Texas Instruments, Inc. (TXN), NextEra Energy, Inc. (NEE), Kimberly-Clark Corporation (KMB).
Wednesday: AT&T, Inc. (T), The Boeing Company (BA), The CocaCola Company (KO), Lam Research Corporation (LRCX), Union Pacific Corporation (UNP), ServiceNow, Inc. (NOW), Thermo Fisher Scientific, Inc. (TMO), General Dynamics Corporation (GD), O’Reilly Automotive, Inc. (ORLY), Chipotle Mexican Grill, inc. (CMG).
Thursday: Amazon.com, Inc. (AMZN), Intel Corporation (INTC), Ford Motor Company (F), AbbVie, Inc. (ABBV), Mastercard, Inc. (MA), Bristol Myers Squibb Company (BMY), McDonald’s Corporation (MCD), Northrop Grumman Corporation (NOC), HCA Healthcare, Inc. (HCA), Honeywell International, Inc. (HON), T-Mobile US, Inc. (TMUS), Southwest Airlines Co. (LUV), Boston Scientific Corporation (BSX).
Friday: Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), The Procter & Gamble Company (PG).
Source: Zacks, July 21, 2023
Footnotes and Sources
2. The Wall Street Journal, July 21, 2023.
3. The Wall Street Journal, July 21, 2023.
4. CNBC, July 20, 2023.
5. Yahoo!Finance, July 19, 2023.
6. The Wall Street Journal, July 20, 2023.
7. IRS.gov, January 12, 2023.
8. Allure, April 24, 2023.
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Weekly Market Insights: Stocks Advance and Retreat on Mixed News
July 24, 2023