Markets “In a Nutshell” for July 26, 2021
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 1.10%, the S&P 500 was up 2.00%, and the NASDAQ rose 2.80%. Foreign stocks (MSCI EAFE) were down, falling 0.20%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 1.28%. (Data source: Wall Street Journal)
Volatility Picks Up
Market volatility picked up the past week as on Monday the Dow Jones lost over 700 points and the S&P declined 3% over 5 days after Monday. However, by the end of the week, on Friday, markets were once again at all-time highs. Over the course of the past few months we have seen these small pullbacks that last only a few days before markets continue to break all time high records and we saw this again last week. This is most likely due to the extreme liquidity that the Fed has supplied the market and even on the slightest pullbacks people are right there to put more money to use and push markets higher.
Even Strong Markets Have Pullbacks
As we saw some volatility in the market last week, this is a reminder that all strong markets have pullbacks here and there. Even in the longest bull market, which lasted from 2009-2020, there were 6 instances where the market dropped at least 10%. However, after those pullbacks the next 6 months had an average return of 18.3%. The slight dip we saw in the market early last week may have been from fears of the Delta variant of Covid-19 but overall the market seems to be in a good position. The Fed is still being accommodating to the market, the economy continues to grow and is expected to continue to grow as more and more people head back to work. Corporate profits are also increasing double digits’ year over year. This should be seen in the next couple of weeks as many companies will be reporting earnings.
What percent of the S&P 500 will report earnings this week? (Scroll Down for Answer)
Have a Great Week!
1. 33%. An expected 165 companies in the S&P 500 will report earnings this week including, Apple, Amazon. Alphabet, Facebook, Microsoft and Tesla.