What a week it’s been on Wall Street! We saw the Nasdaq Composite and S&P 500 both hit brand new record highsby Friday’s close, capping off a truly strong week for investors.
By the end of trading, the Dow managed to climb 0.4%, once again getting tantalizingly close to its own all-time high. The S&P 500 also finished the day up 0.4%, and the tech-heavy Nasdaq Composite gained 0.2% on the session. Looking at the whole week, the Dow rose a solid 1.2%, the S&P 500 was up 1.4%, and the Nasdaq Composite popped a full 1%.
Interestingly, Alex King from Cestrian Capital Research pointed out something many might be feeling: “Considering that the market this week just got on with the job of making investors quietly richer, there was an awful lot of anxiety and hand-wringing on the part of said investors. There seems to be something about continuous new highs that unnerves people, for what reason we know not. Do people prefer misery?” He added that even with all the analysis suggesting a pullback is due, it’s just not happening. It seems the “pain trade” for many continues to be “up.”
Sector Performance and Bonds
When we look at how different sectors performed, nine out of the S&P 500’s eleven segments finished in the green. Materials and Industrials really led the charge with strong performances. On the flip side, Energy was the day’s weakest performer, as oil prices actually fell by 1.7%.
Over in the bond market, U.S. Treasury yields were pretty quiet. The longer-end U.S. 10-year Treasury yield dipped just 1 basis point to 4.38%, while the shorter-end U.S. 2-year Treasury yield stayed near even at 3.91%.
Economic Snapshot and Earnings News
On the economic front, it looks like durable goods dropped less than analysts feared in June. New orders for manufactured durable goods were down 9.3% month-over-month, which was better than the 10.4% consensus forecast. This is a good sign! Seeking Alpha analyst Christopher Yates noted, “As it stands, hard economic data in the US has shown signs of weakness over the past couple of quarters. But, contrary to the belief of many, the US economy remains robust and far from recessionary levels.”
Finally, in earnings news, Intel shares took a hit on Friday, dropping 8.4%. The company’s bottom line in the second quarter actually missed Wall Street’s estimates, and their third-quarter outlook also didn’t quite impress investors. To top it off, Intel announced a 15% workforce reduction.
It sounds like it was a fascinating week with some strong market gains, a bit of investor apprehension despite the good news, and some interesting economic and earnings updates. What do you think this all means for the week ahead?