Markets Finish Week Mixed, Miss Posting a Three-peat…..
U.S. equities finished out a bumpy week mixed, dashing hopes of a three-peat for all the major indexes to post weekly gains, as a recent pullback in tech shares pushed the Nasdaq into negative territory for the week. The persistent rise in new COVID-19 cases appeared to be the main culprit in the lack of conviction, despite a recent string of upbeat global economic data and further progress out of the Health Care sector on finding an answer to the pandemic. In economic news, June housing construction activity improved in June but at a slightly slower pace than expected, and July consumer sentiment unexpectedly deteriorated. On the earnings front, Netflix posted stronger-than-expected subscribers in Q2 but its guidance fell short, while J.B. Hunt Transport reported better-than-expected Q2 results. Treasury yields were higher as bond prices slipped and the U.S. dollar fell, while crude oil prices dipped and gold gained ground. Europe finished mixed, while markets in Asia were mostly higher.
The Dow Jones Industrial Average declined 63 points (0.2%) to 26,672, while the S&P 500 Index increased 9 points (0.3%) to 3,225, and the Nasdaq Composite advanced 29 points (0.3%) to 10,503. In moderate volume, 869 million shares were traded on the NYSE and 4.3 billion shares changed hands on the NASDAQ. WTI crude was down $0.18 at $40.75 per barrel and wholesale gasoline lost $0.01 to $1.22 per gallon. Elsewhere, the Bloomberg gold spot price was $13.41 higher at $1,810.57 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—lost 0.4% to 95.94. Markets finished mixed for the week, as the DJIA advanced 2.3%, the S&P 500 rose 1.3%, but the Nasdaq Composite fell 1.1%.
The July preliminary University of Michigan Consumer Sentiment Index declined to 73.2 versus the Bloomberg expectation of a slight rise to 79.0 from June’s 78.1 reading. The surprising slide for the index came as the current conditions component deteriorated more than projected and the expectations portion of the survey unexpectedly fell. The 1-year inflation forecast rose to 3.1% from June’s 3.0% rate, and the 5-10 year inflation forecast increased to 2.7% from the prior month’s 2.5% level.
Housing starts for June rose 17.3% month-over-month (m/m) to an annual pace of 1,186,000 units, below forecasts of 1,190,000 units, and compared to May’s upwardly-revised pace of 1,011,000 units, from the initially-reported 974,000 units. Moreover, building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, gained 2.1% m/m to an annual rate of 1,241,000, south of expectations of 1,293,000 units, and compared to May’s downwardly-revised 1,216,000 rate.
Treasuries were lower following the data and as the stock markets remained choppy, as the yield on the 2-year note nudged 1 basis point (bp) higher to 0.15%, the yield on the 10-year note gained 2 bps to 0.63%, and the 30-year bond rate was up 3 bps at 1.33%.
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