There was plenty for Market Watchers to digest this week with market-moving news out of China and the U.S. as well as noteworthy economic data from the IMF and Canada.
Starting in the U.S., Q2 GDP grew at a 6.5% annual clip lifting the economy’s size above its pre-pandemic level. The milestone underlines how quickly the U.S. economy has recovered as U.S. consumers resumed spending in concert with business re-openings, vaccinations and large infusions of government aid. The Federal Reserve has also played a key role implementing easy-money policies at the start of the pandemic which will continue the bank confirmed at this week’s two-day policy meeting. When the Fed does start to tighten it will begin with a reduction, or tapering, in monthly Treasury and mortgage bonds purchases. Also in the U.S., President Biden’s US$1 trillion infrastructure deal cleared its first procedural hurdle mid-week advancing to the Senate where it still faces a long road to being approved. On the Q2 U.S. earnings front, a large majority of S&P 500 companies continue to top earnings estimates and exceed revenue projections buoying markets south of the border. Turning to China, the Beijing government continued its crackdown on the technology sector announcing new rules on private tutoring and online education firms as well as ordering Internet giants to fix certain practices that previously went unquestioned. In economic news, the International Monetary Fund released its latest outlook Tuesday leaving its 6% global growth forecast intact from its April estimate. The big change to the IMF’s outlook was an increase in growth projections for developed countries and reductions for developing countries as lower vaccination rates have left them more vulnerable to economic fall-out. Finally in Canada, inflation decelerated for the first time this year with CPI up 3.1% yoy in June compared to 3.6% in May. The read exceeds the Bank of Canada’s 1% to 3% inflation range but the decrease supports the bank’s view that the price run-up is transitory.
N.A. markets were mixed this week
For the four days covered in this report, the Dow added 23 pts. to close at 35,084, the S&P 500 gained 8 pts. to finish at 4,419 and the Nasdaq fell 58 pts. to settle at 14,778. In Canada, the TSX rose 123 pts. to end at 20,311 pts., a new record high.
source https://richarddri.ca/markets-digest-latest-batch-of-earnings/
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