There was plenty for Market Watchers to digest this week including Q2 earnings releases, central bank news and economic data.
In the U.S., analysts project profits for S&P 500 companies to rise 64% in Q2 from a year earlier – the fastest rate of growth in more than a decade – according to FactSet. In Europe, Q2 earnings are expected to be even stronger with the 600 biggest listed companies expected to surge 110% yoy for the April to June quarter according to Refinitiv IBES data. As impressive as the projections are, the measures come from a year ago period when both economies were brought to a standstill due to Covid. Turning to central banks, the BoC made no policy changes Wednesday leaving its key interest rate at 0.25%. The bank did, however, reduce weekly bond purchases from $3 billion to $2 billion. South of the border, Fed Chairman Powell presented the bank’s semi-annual policy report and testified before two separate committees Wednesday and Thursday. In remarks, Powell said the bank will continue to discuss the appropriate timing to reduce monthly bond purchases while re-iterating his stance the U.S. economy is “still a ways off” from fully recovering. Powell’s comments regarding inflation remained unchanged with him saying the upward move in prices is transitory. This despite yoy U.S. consumer prices rising faster-than-anticipated, up 5.4% in June, the biggest 12-month jump since August 2008. Turning to China, the world’s second-largest economy reported a Q2 GDP growth rate of 7.9% Thursday compared to a year earlier. Monthly readings of industrial output, retail sales, fixed asset investment and urban employment met or exceeded estimates in June. The readings, in combination with stronger than-expected import and export data released earlier in the week, suggest China will meet its full-year growth target of 6% or more. Finally in commodities news, the door appears to be opening for OPEC+ to reach a deal to boost oil production. Last week, a tentative deal faltered due to objections from the United Arab Emirates which appear to have since been resolved.
N.A. markets were a mixed bag this week
For the four-day period covered in this report, the Dow added 117 pts. to close at 34,987, the S&P 500 fell 9 pts. to end at 4,360 and the Nasdaq gave back 158 pts. to finish Thursday at 14, 543. In Canada, the TSX lost 74 pts. to settle at 20,183.
source https://richarddri.ca/equities-mixed-heading-into-earnings-season/
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