07|27|2021

Rocky Growth | July 23, 2021

AUTHOR: Jason J. Roque, MS, CFP®, APMA®, AWMA®
TITLE:       Investment Adviser Rep – CCO
TAGS:   S&P 500, Stagflation, Debt Ceiling, Jobs

In spite of a rocky start, markets grew nicely this last week. Should we expect more growth to come?

Monday

Markets dove to open the week. The S&P 500 lost 1.6%. Fears over slower growth due to the Delta Variant and rising inflation gripped the markets. Earnings did not fail to impress for the day, which resulted in a few highlights. However, they did not burn bright enough to offset the negative sentiment.

Tuesday

Markets rebounded strongly as the Monday move turned into a ‘buy the dip’ mentality. The S&P 500 ended up gaining 1.5% on the day. Housing starts out-performed, coming in at a 6.3% increase versus 2.1% the prior month.

Wednesday

The move higher continued on Wednesday, as earnings were in focus. Earnings pushed the markets higher as Netflix was the only major company to miss earnings on the day. The economic data calendar was light with mortgage data being the highlight.

Thursday

The S&P 500 advanced .20% on Thursday. It was a day where it felt as though the markets were chasing their own tail. Markets actually opened in the green, despite initial jobless claims missing expectations. It then fluctuated into the red fulfilling the economic data that was released, but ended back in the green… Investor sentiment has been running strong ever since Monday’s sell off.

Friday

Markets rallied into the end of the week, with the S&P 500 climbing 1.01% on the day. Manufacturing data outperformed, coming in at 63.1, beating the 62.0 expectation. Services fell short, falling to 59.8. While strongly expansionary, it missed the intended mark of 64.8. This is an indicator that the re-opening is moving slower than expected. A slower re-opening could signal that inflation may not be as ramped as initially thought by many investors.

Conclusion

The strong Friday performance brought the week to a close up 1.95% on the S&P 500. This was an impressive week of gains when you consider that the S&P 500 lost 1.6% on Monday. The rebound and strong close on Friday are a testament to earnings. They are currently running at 86% of companies beating expectations. We are about a quarter of the way through earnings season, so there is still much to look forward to.

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