Company / Analytics

Week 29 in Brief

How did the major indexes perform?

U.S. stocks closed Friday mostly along the flatline as traders concluded a volatile week while a steep decline in Netflix kept other big tech shares in check. U.S. Consumer sentiment unexpectedly fell in July over June as a resurgence in coronavirus cases weighed on Americans’ outlooks for the economy.

• The Dow Jones Industrial Average closed at 26,671.95, down 62.76 points, or 0.23%, while the S&P 500 added 9.16 points, or 0.28%, to close at 3,224.73. The Nasdaq Composite gained 29.36 points, or 0.28%, ending the week at 10,503.19.
• For the week, the Dow finished 2.3% higher, the S&P 500 booked a gain of 1.3%, and the Nasdaq lost 1.1%.
• Friday’s drop in the Dow was its second consecutive day of losses, after breaking a four-day winning streak on Thursday. The decline came after new data showed a greater than expected number of new jobless claims were filed last week. Further economic data on Friday showed ongoing improvement in the housing market, with both building permits and housing starts rising in June over May.
• Big Tech Stocks struggled this week. Over the past week, a rotation out of tech stocks and other high-growth shares that had led the market’s rally from March lows was underway. Facebook, Alphabet, and Microsoft were all down weeks to date.
• Amazon posted its first weekly decline in 11 weeks, dropping more than 7%. It was also Amazon’s worst one-week performance since the week ending Feb. 28. Amazon closed at $ 2 961,97 after going upwards of $3,300 on Monday.
• Shares of Netflix Inc. fell 6.5%, as concerns over its second-half outlook overshadowed a jump in revenue and its addition of more than 10 million new subscribers. Netflix shares have rallied 63% in the year to date. Netflix closed the week at $ 492,99 from a high of over $5.71 last week.
• U.S. consumer sentiment index fell to 73.2 in July from 78.1, compared with expectations for a reading of 78.6, as a resurgence in coronavirus cases weighed on Americans’ outlooks for the economy. Indices capturing consumers’ assessments of current conditions and future expectations each fell short of consensus estimates, with the latter declining sharply to 66.2 when a rise to 74.0 had been expected. Further declines are more likely in the months ahead as the coronavirus spreads and causes continued economic harm, social disruptions, and permanent scarring, economists warned.
• COVID-19: The U.S. reported 77,200 coronavirus cases on Thursday, a record, according to Johns Hopkins University. That spike brought the total number of confirmed U.S. infections to more than 3.57 million. Covid-19 related deaths are up to more than 138,000.

European stocks closed mixed as EU leaders meet for stimulus talks. Positive earnings from Daimler AG and Ericsson AB pulled carmakers and tech stocks higher.

• The pan-European Stoxx 600 Europe Index closed up 0.2%, at 372.71, while London’s FTSE 100 Index added 0.6% to close at 6,290.30.
• Traders in Europe are holding out hope for policymakers to conclude a stimulus pact. German Chancellor Angela Merkel raised doubts on Friday that European Union leaders would be able to agree this week on a landmark 750 billion-euro ($855 billion) recovery fund to help their economies heal from the pandemic.
• The bill could face opposition from the “frugal four” member states of Austria, Denmark, Sweden, and the Netherlands, and may also be subject to a veto from Hungary which has opposed linking the distribution of funds with the upholding of the EU’s democratic values.
• Positive earnings from Daimler AG and Ericsson AB pulled carmakers and tech stocks higher. Daimler revealed ahead of its July 23 earnings report that it will post a smaller-than-expected operating loss of 1.68 billion euros for the second quarter. Daimler shares gained 4.3%, leading a broad rally for the automotive sector. The stock closed trading at 39,34 EUR.
• Ericsson beat profit estimates on the back of stronger margins on telecoms equipment sales, and the company reaffirmed its 2020 and 2022 financial guidance and sending the stock 11% higher. The stock closed trading at 97,66 SEK ($10.89).
• Meanwhile, British Airways is retiring its fleet of 31 Boeing 747s four years ahead of schedule as it braces for a sustained slump in global air travel due to the pandemic.

Asian markets finished mixed as of the most recent closing prices. Chinese shares were steady after a more than 4% slide on Thursday, with investors assessing moves by policymakers to tame signs of exuberance.

• The Shanghai Composite added 0.13% to about 3,214.13 while the Shenzhen component advanced 0.913% to around 13,114.94. Hong Kong’s Hang Seng index rose 0.69%, as of its final hour of trading.
• South Korea’s Kospi advanced 0.8% to close at 2,201.19.
• In Japan, the Nikkei 225 dipped 0.32% to close at 22,696.42 while the Topix index shed 0.33% on the day to 1,573.85.
• In Australia, the S&P/ASX 200 closed 0.38% higher at 6,033.60.

Commodities and other assets

• West Texas Intermediate crude for August delivery fell by 16 cents, or 0.4% to settle at $40.59 a barrel. September Brent crude, the global benchmark on ICE Futures Europe, declined by 23 cents, or 0.5% at $43.14 a barrel.
• The decline marked a back-to-back session of declines for the commodity, which has risen 3% for July to date, but struggled to push above the $40 per barrel level as economic concerns around the coronavirus pandemic linger.
• Meanwhile, gold edged 0.5% higher to settle at $1,810.

Currencies

• The dollar was broadly lower on Friday as the euro rose to just under a four-month high, with negotiations underway between European Union leaders on a recovery fund that could lift the bloc out of the current recession. The euro was up 0.49% at $1.144, just off Wednesday’s top of $1.145, its highest since the coronavirus financial crash in March.
• The ICE U.S. Dollar Index, a measure of the U.S. currency against a basket of six major rivals, fell 0.4% to 95.930, with greenback dropping against other major currencies.
• Bond yields rose, with the yield on the 10-year Treasury note up about two basis points to 0.63%. Bond yields and prices move in opposite directions.