The Market Wrap for August 3: Key U.S. Indices Booked Four Consecutive Monthly Gains in July
Asif Imtiaz Aug 03, 2018
Major U.S. stock indices remained range-bound over the last month and the rampant volatility made it difficult to gauge the direction of the market. However, key stock indices in the U.S. actually went up for the fourth straight month in July.
There was a lot of positive news to feel optimistic about this week as most Q2 earnings reports posted better-than-expected EPS and the ongoing trade war eased a little as rumors floated that the U.S. and China are about to start talking to mitigate the situation.
However, the Federal Reserve sounded way too optimistic and hawkish than what the market would have liked. Nonetheless, the FOMC statement cited household spending to drive economic growth in the coming months and investors translate that as a sign of more rate hikes to come. Consequently, the Dow fell sharply on Wednesday following the release of the Fed’s statement.
To sum up, the Fed didn’t hike the overnight rate as expected but said enough to keep the market on its toes. Perhaps the Fed is trying its best to avoid any bubble in the economy and that’s something we should appreciate.
Be sure to check out our previous week’s edition here, in which investors appreciated President Trump’s hardball tactics with the EU that paid off in the end.
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