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The week started with a bang as global equity markets reacted to Chinese growth and stabilization concerns. In an effort to soften the landing and boost sentiment, Beijing officials confirmed the implementation of a new stock buying program. The flow on effects from the recent developments in Shanghai have been significant, with commodities and leveraged emerging markets experiencing the full brunt.
Earnings season was in full swing this week, with investors looking for signs of sustained revenue and EPS growth. According to Thomson Reuters, analysts have priced in a 0.3% dip in Q2 earnings in light of recent macroeconomic events.
Greek officials delayed talks with creditors on Monday, citing location and logistics issues. The Dow Jones finished the session 127 points lower, with a better than expected 3.4% rise in the Durable Orders report for June having little impact. The market had priced in 3%.
Oil and earnings were two key positive drivers on Tuesday, with the S&P 500 finishing 1.24% higher. On the economic front, the Consumer Confidence Index fell 9.1 index points from the previous period, with global economic uncertainty cited as the cause.
Keeping rates on hold, Fed Chief Janet Yellen highlighted a ‘moderate rise’ in economic activity and consumer spending in the June/July period. Economists expect a rate rise in September. The Dow Jones finished the day 0.69% higher. Pending Home Sales contracted 1.8% in June, with a rise in costs blamed. The market had factored in a 1.0% rise.
Muted session on the equity markets, with the Dow Jones finishing 5 points lower at 17,745. U.S. GDP came in slightly below consensus, with the Commerce Department announcing an annual figure of 2.3%. Initial Claims were higher than the previous period, with 267,000 reported for the period. This was better than anticipated.
A relatively subdued start to Friday, with the Dow Jones falling 40 points in early trade. The Chicago Purchasing Managers Index highlighted buoyant business conditions, with a rise in July from 49.4 to 54.7. Consumer sentiment measured by the University of Michigan was slightly lower at 93.1.
Next week will see earnings reports from: Clorox Co. (CLX ), CAN Financial Group (CNA ), Delek U.S. Holdings (DK), Eagle Materials (EXP ), Endurance Specialty Holdings (ENH), Icahn Enterprises (IEP ), Landauer (LDR), Mercury General (MCY ), Aetna (AET), Archer Daniels Midland (ADM ), Cimarex Energy (XEC ), CVS Health Corporation (CVS ), Emerson (EMR ), Kellogg Co. (K ), Mosaic Co. (MOS ), Parker Hannifin Corp. (PH ).
The following economic data will also be reported: Personal Income, Personal Spending, ISM Index, Construction Spending and Auto Sales on Monday, Factory Orders on Tuesday, Trade Balance and ISM Services on Wednesday, Initial Claims and Continuing Claims on Thursday and NonFarm Payrolls, Unemployment Rate and Consumer Credit on Friday.