Sold Out: The Best Show in Town!
Each of the large indexes on Wall Street last week had what to brag about last week! The market capped off another winning week, each index recording gains of at least 1.5%!
We’ll start with the Dow Jones, which had significantly lagged behind after trade war headlines took a bite out of its member stocks’ market cap. At the same time, on Friday, the index ended above the 25,000 point level, and even more impressively, outdid its competitors with weekly gains of 2.3%. The week prior, the blue-chip index had risen just 0.8%.
And now, on to the S&P 500. After a number of attempts, the broad market index finally ended above the 2,800 point level – for the first time since February – at 2,801.3 points. The index notched off weekly gains of 1.5%. The question, now, is whether the market has the momentum to rise higher – or this was a once-off occurrence.
The NASDAQ ended Friday up with meager gains of 0.03%. That was enough, though, to help it achieve an all-time high for the second trading day in a row! In summary for the week, the tech-leaning index ended up 1.8%.
Concerns about a trade war have been placed on the back-burner of late, with the exception of last Wednesday when the market went into sell-off mode when news broke that Trump planned on imposing another $200 billion in tariffs on goods imported from China. Besides the turn for the worse on that particular trading day, the market has succeeded in rising on 6 of 7 trading days since July 4th. With that said, all it takes is one “doomsday” headline about the trade war and the market could see the floor taken out from beneath it.
Fortunately, the earnings season is likely to redirect the market’s attention from trade issues this coming week, as the curtain opens on the best show in town: “The Q2 Earnings Season.” The large banks – J.P. Morgan (JPM), Citigroup (C) and Wells Fargo (WFC) kicked off the opening kickoff on Friday, releasing their financial results. Even though most of the banks hit their forecasts, they provided little in the way of fuel to the ongoing rally. In effect, each of the abovementioned large banks ended Friday down.
Regardless, the market is anticipating a strong earnings season. On the menu: A jump of over 19% in year-over-year S&P 500 firm earnings, with an 8.2% bounce in revenues.
Have a great trading week!