Closing Comment — Friday, July 30, 2021
DJIA: 34,935.47, down 149.06
S&P 500: 4,395.26, down 23.89
Nasdaq Composite: 14,672.68, down 105.58
Stocks fall, but cap six-month winning streak
U.S. stocks closed firmly lower on Friday, as Amazon’s disappointing earnings report weighed on investor sentiment. The e-commerce giant slumped more than 7% after posting its first revenue miss in three years and providing weaker-than-expected forward guidance. The Dow fell 149 points, while the S&P 500 lost 0.5% with both benchmarks capping a 0.4% weekly decline. Underperformance in growth-oriented shares sent the tech-heavy Nasdaq Composite down 0.7%, extending its weekly losses to 1.1%. Despite the pullback, the S&P 500 notched its sixth consecutively monthly advance with a 2.3% rally. The Dow gained 1.3% in July, while the Nasdaq Composite climbed 1.2%.
Seven of 11 S&P 500 sectors finished in negative territory, with Consumer Dictionary leading laggards. Energy stocks also underperformed, with Chevron and Exxon Mobil falling 0.9% and 2.4%, respectively, despite both companies exceeding Wall Street's earnings expectations. The Consumer Staples group bucked the downtrend, with Proctor & Gamble adding 2% after beating top and bottom line estimates. In other earnings, Caterpillar slid 2.7% as a warning of margin pressures in the current quarter overshadowed upbeat quarterly figures.
On the data front, the core PCE deflator (the Federal Reserve's preferred measure of inflation) climbed 3.5% year-over-year, above the 3.4% annualized uptick in May and represents the highest reading since 1991. Separately, personal income unexpectedly rose 0.1% in June, while personal spending jumped a better-than-anticipated 1%. Treasuries strengthened, with the yield on the 10-year note down four basis points to 1.23%. In commodities, WTI crude rose to $73.83/barrel, capping a 2.5% weekly gain. COMEX gold lost 1% amid a stronger dollar.
Midday Comment — Friday, July 30, 2021
DJIA: 34,956.02, down 128.51
S&P 500: 4,396.44, down 22.71
Nasdaq Composite: 14,682.77, down 95.49
Stocks lower midday with earnings in focus
U.S. stocks are firmly lower near midsession Friday, as Amazon’s disappointing earnings report weighs on investor sentiment. The e-commerce giant is slumping 7.2% after posting its first revenue miss in three years and providing weaker-than-expected forward guidance. The Dow is falling 128 points, while the S&P 500 is losing 0.5%. The tech-heavy Nasdaq Composite is sliding 0.6%. All three major averages are poised for weekly declines, but remain on track for monthly gains. Notably, the S&P 500 is set to rise 2.3% in July, which would be its sixth consecutively monthly advance.
Seven of 11 S&P 500 sectors are trading in negative territory, with Consumer Dictionary leading laggards. Energy is also underperforming as Chevron and Exxon Mobil each fall more than 1% despite both companies exceeding Wall Street's earnings expectations. The Consumer Staples group is bucking the downtrend, with Proctor & Gamble adding 2.7% after beating top and bottom line estimates. In other earnings, Caterpillar is falling 3.8% as a warning of margin pressures in the current quarter overshadow upbeat quarterly figures. Breadth is negative on issues by 7:4 on the NYSE and 7:5 on the Nasdaq. Composite NYSE volume is nearly 1.6 billion shares.
On the data front, the core PCE deflator (the Federal Reserve's preferred measure of inflation) climbed 3.5% year-over-year, above the 3.4% annualized uptick in May and represents the highest reading since 1991. Separately, personal income unexpectedly rose 0.1% in June, while personal spending jumped a better-than-anticipated 1%. Treasuries are strengthening, with the yield on the 10-year note down five basis points to 1.22%.
Opening Comment — Friday, July 30, 2021
DJIA: 35,058.26, down 26.27
S&P 500: 4,407.85, down 11.30
Nasdaq Composite: 14,720.73, down 57.53
Stocks open lower; head for July gains
U.S. stocks are lower in early trading Friday, as a disappointing earnings report from Amazon weighs on investor sentiment. The e-commerce giant is slumping 7% after posting its first revenue miss in three years and providing weaker-than-expected forward guidance. The Dow is slipping 26 points, while the S&P 500 is falling 0.3%. The tech-heavy Nasdaq Composite is losing 0.4%. Still, all three major averages are poised to rise at least 1% in July, with the S&P 500 heading for a sixth consecutive monthly advance.
In other earnings, Proctor & Gamble is adding 2.4% after beating top and bottom line estimates. Chevron is adding 0.1%, while rival Exxon Mobil is losing 1.2% despite both Energy giants exceeding Wall Street's projections amid higher oil prices and improving market conditions. Caterpillar is falling 2.7% despite posting upbeat quarterly figures. Breadth is positive on issues by 8:5 on the NYSE and 4:3 on the Nasdaq.
On the data front, the core PCE deflator (the Federal Reserve's preferred measure of inflation) climbed 0.4% in June, below expectations for a 0.6% uptick and the 0.5% prior rise. Year-over-year, the gauge rose 3.5%, picking up pace from the 3.4% annualized uptick in May, which had been the highest reading since April 1992. Separately, personal income unexpectedly rose 0.1% in June, while personal spending jumped a better-than-anticipated 1%. Meanwhile, the final reading of July consumer sentiment from the University of Michigan unexpectedly improved to 81.2 from 80.8. Treasuries are strengthening, with the yield on the 10-year note down three basis points to 1.24%.