Week 31 in Brief
How did the major indexes perform?
- Stocks finished Friday’s session higher as shares of Big Tech fueled gains. Apple shares jumped to a new all-time high and the company’s valuation now tops that of Saudi Aramco, meaning the tech giant is the most valuable company in the world.
- The Dow Jones Industrial Average added 114.67 points, or 0.4%, to close at 26,428.32, the S&P 500 gained 24.90 points, or 0.8%, ending the trading day at 3,271.12, and the tech-heavy Nasdaq Composite closed at 10,745.27, up 157.46 points or 1.5%.
- For the week, the Dow lost 0.2%, while the S&P 500 gained 1.7% and the Nasdaq surged 3.7%.
- The week was weighed by a mixed batch of earnings results, disappointing economic data, and a lack of progress on Capitol Hill toward another coronavirus aid package.
- Tech earnings were in focus following results from some of the industry’s largest and most powerful players after Thursday’s closing bell. Apple roared 10.5% higher, after it reported record profit, crushing Wall Street expectations, and announced a 4-for-1 stock split that will change the pecking order of the price-weighted Dow Jones Industrial Average (Apple recorded a new price of $ 425,04.
- Amazon shares were up 3.7% after delivering results that soared past forecasts for sales and earnings, Facebook shares rose 8.2% after it topped expectations for earnings and revenue, and Alphabet shares were down 3% after the Google parent met expectations despite a dip in advertising revenue.
- GDP Plunges to Record Low in Q2: On Thursday, the Commerce Department reported that GDP fell at a record 32.9% annual pace in the second quarter compared to the consensus estimate of a 34% decline. With millions of Americans still out of work, and several businesses closing doors amid the global pandemic, the U.S. economy had to suffer its steepest contraction since the Great Depression in the second quarter. The report comes amid a recession that began in February led by the coronavirus pandemic and pulled first-quarter growth down 5%.
- Vaccine News: European drugmaker Sanofi said the U.S. government will pay up to $2.1 billion for the COVID-19 vaccine candidate it is developing with GlaxoSmithKline GSK. The funding, part of Operation Warp Speed, will be used to support ongoing clinical development and manufacturing of the experimental candidate, with at least 100 million doses promised to the U.S.
- European stocks posted their first monthly decline since a market selloff in March on Friday as growing doubts over a global recovery from the coronavirus crisis overshadowed a batch of strong earnings from technology firms. Shares in London lead the region.
- The FTSE 100 is down 1.54% while France’s CAC 40 is off 1.43% and Germany’s DAX is lower by 0.54%.
- The pan-European STOXX 600 index gave up early gains to close 0.9% lower, pressured by a weak open for Wall Street as optimism from stellar earnings reports from big tech names faded.
- An early reading of the euro zone’s economy showed the bloc shrank by a bigger-than-expected 12.1% in the second quarter, its deepest contraction on record as lockdowns ravaged business activity.
- Nearly 50% of the companies listed on the STOXX 600 have reported quarterly earnings so far, and 64% of those have surpassed beaten-down profit expectations, according to Refinitiv data.
- The top gainer on the STOXX 600 was Finnish telecom network equipment maker Nokia, which is up 12.5% after reporting an unexpected rise in underlying profit as it reduced low-margin business.
Asian markets finished mixed as of the most recent closing prices.
- China’s CSI 300 index rose 0.8%, the Shanghai Composite gained 0.7%, Hong Kong’s Hang Seng Index fell 0.5% and Japan’s Nikkei 225 slumped 2.8%.
- China’s official manufacturing Purchasing Managers’ Index for July came in above expectations at 51.1, according to the country’s National Bureau of Statistics. Analysts polled by Reuters expected a reading of 50.7.
- Oil prices rose on Friday and finished the month higher, benefiting from the news that U.S. oil output cuts in May were the largest on record.
- Brent crude was up 24 cents, or 0.7%, at $43.18 a barrel. On Thursday, Brent closed 1.9% down after touching its lowest level since July 10.
- West Texas Intermediate crude futures gained 35 cents, or 0.88%, to settle at $40.27 per barrel, after dropping 3.3% in the previous session.
- Meanwhile, Gold settles at a record high, posts the best month in more than 4 years. Gold futures settled 1.06% higher at $1,962.8 per ounce, a new record close, after earlier rising to a new all-time intraday high of $2,005.4. It was the metal’s eighth straight day of gains. Gold also posted its eighth straight weeks of gains for its longest weekly winning streak since 2006. For the month gold gained 9.01% for its best month since Feb. 2016. It was the fifth straight month of gains and the longest monthly winning streak since Dec. 2010.
- The yield on the 10-year Treasury note fell 1.8 basis points to 0.538%. Yields move in the opposite direction of prices.
- EUR rose the most in a decade this month, GBP is headed for its best July since 1990, and for the first time this year, every major currency in the world rose against the greenback.
- The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 92.552 after declining from levels above 93.8 earlier in the trading week.
- EUR surged to as high as $1.1908 before settling at $1.1854, up 0.1% on the day.
- JPY traded at 104.35 per dollar after strengthening from levels above 105.3 against the greenback this week.
- AUD changed hands at $0.7217 after yesterday’s turbulent trading saw it slide below $0.716.