Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 1.3%, the S&P 500 was up 2.4%, and the NASDAQ rose 3.9%. Foreign stocks (MSCI EAFE) were also up, rising 2.3%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.28%. (Data source: Wall Street Journal)
Corporate Earnings Continues to be Strong
Roughly 90% of S&P 500 companies have reported earnings for the past quarter, and 82% of companies have beaten expectations by an average of 8.5%. Worries of how tariffs will impact companies have continued to lessen as earnings remain strong and companies seem to be working their way through the tariff effect. Overall earnings growth for 2025 is now projected to be double digits for the year after worries earlier in the year
Labor Productivity Improves
Labor productivity increased at 2.4% annualized in the 2nd quarter, beating estimates of 2.2%. Compensation also came in strong as hourly wages increased 4.2% year-over-year. Wage growth continues to outpace inflation, giving the consumer more buying power, helping to fuel the economy. Increased productivity helped keep labor costs down, which eases inflation pressure. If we see productivity continue to increase, it may offset any inflation pressure we see from tariffs in the coming months.
Eli Lilly Has Worst Day in 25 Years
Eli Lilly reported earnings last week and beat expectations but fell sharply on disappointing results for its obesity pill. Expectations for the pill were for patients to lose 15% of their body weight, but the results showed 12% of body weight lost. The stock fell nearly 18% last week on this news despite strong earnings. The company has had a rough 12 months as the stock is down nearly 30%. Despite the decline, the company still has a value of nearly $600 billion. (CNBC)
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Quiz
How much is the MSCI EAFE (international markets) up for the year? (Scroll Down for Answer)
- 11.9%
- 14.2%
- 17.8%
- 19.9%
Answer:
3. 17.8%. International equities have continued to outperform domestic markets. The Dow Jones is up 3.8% for the year and the S&P 500 is up 8.6%.
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