Following market this week was exhausting as we headed through the week. It was a tumultuous week of headlines that were eventually accompanied by some vast gains, which boosted some significant advancements for the month. After the shaky first quarter this year, they were driven by short-covering activities and a desire to add additional exposure to equity markets.
In a nutshell, around 175 S&P 500 companies released their June results for the quarter. In addition, the FOMC held a policy meeting, the market economic calendar was dominated by an Advance Q2 GDP Report, and Congress approved an agreement worth $280 billion that included $52 billion for expanding semiconductor manufacturing capacity designed to stave against competitors from China.
Alphabet, along with Microsoft, both missed their anticipated earnings estimates. Microsoft stated the reasons for this being adverse currencies, zero-COVID-19 policy in China as well as a growing market for PC components (as other companies have noted) as well as poor results in their advertising businesses, and the decision of the company to end sales of items and products in Russia. In addition, the cloud market, Xbox, and gaming spending declined; all that might have gone wrong was apparent. But its stock did rise. It was not an absolute disaster. However, it was not bad either.
On Wednesday, The Federal Reserve raised its interest rate by three-quarters to 2.5 percent. The war against inflation has caused the Fed to intensify its efforts to reduce inflation and shrink the balance account. In other words, its quantitative easing has permitted too much spending for far too long. "Demand is still strong, and the economy is still on track to grow this year," Fed Powell stated.
In the United States, the average 30-year mortgage market rate hovers at 5.54 percent, up from 3 percent earlier in the year. However, with a further increase expected in the coming year, this should be a reward for those who save. The aim is to reduce inflation to 2%, which officially stands at 9.1 percent (wink, wink).
Our opinion is that inflation is increasing due to a number of critical reasons, including almost full employment throughout North America, exceptionally high prices for energy market(s), and trends of spending too much due to a build-up of demand.
The much-dreaded "R" word (recession) continues to be discussed however the data suggest that we've seen a slowdown, and we're not contracting across all economic sectors.
The For market's second consecutive quarter and declining real GDP (-0.9 percent) was a factor in this view, while the U.S. Treasury market was moving that echoed the notion. The yield on the Two-year note fell nine basis points in the week to close at 2.90 percent, while the Ten-year note yield dropped 14 basis points down to finish at 2.64 percent, resulting in an additional inversion of the Two's-Ten's spread, which is viewed by many as a signal of weak growth or recession.
In this regard, I think it's inappropriate not to highlight that growth stocks once more were the main driver of this week's market rally. The Russell 3000 Growth Index rose 4.9 percent versus a 3.4 percent increase in Russell 3000 Value Index.
It is clear, however, that the largely positive 3.4 percent gain of the Russell 3000 Value Index underlined the broad buying interest. All eleven S&P 500 market sectors increased this week, with gains ranging from 1.6 percent (consumer food items) to 10.3 percent (energy).
The Nasdaq Composite soared 12.4% in July, followed by S&P Midcap 400 with +10.8% print and the small-cap Russell 2000 with +10.4%. The S&P 500 posted a +9.1 percent gain and the Dow Jones Industrial Average with +6.7 percent. The S&P 500 was flirting with 3,600 in the middle of June and ended the month at posting 4,130.
After months of the market slipping lower, silver and gold considerably increased this week. For the week, gold was up $39 to close at $1765, hitting a low of $1681 on July 21. Silver was trading at $20.32, up $1.76 for the same period. Gold volume on Comex was substantial, and for silver, it was more robust on Thursday and Wednesday.
As we see significant market volatility, the Euro market has swung back and forth to the U.S. dollar throughout this week's trading session.
Our chart revealed the continuing battle between bulls and bears when BTC/USD fluctuated at our completed Outer Coin Rally $24,150 set up on July 20. The pair set a new high this week's $24,445 but could not show signs of a rebounding U.S. dollar-driven cryptocurrency market despite gains in U.S. shares.
INDEX: STARTED WEEK ENDED WEEK CHANGE %CHANGE YTD%
DJIA: 31899.29 32845.13 945.84 3.0 -9.6
Nasdaq: 11834.11 12390.69 556.58 4.7 -20.8
S&P 500: 3961.63 4130.29 168.66 4.3 -13.3
Russell 2000: 1806.88 1885.23 78.35 4.3 -16.0
This article was printed from TradingSig.com