What happened in the markets: 15 July - 19 July 2024
Aries Yuangga, Wakil Penasihat Berjangka
The week of July 15 - 19, 2024, was a turbulent period for the financial markets, marked by significant volatility, leadership rotation, and sectoral shifts. From an early-week rally to a late-week tech sector decline, investors witnessed substantial swings in major indexes. This article delves into the key events and movements of the past week, highlights the top moving and shaking stocks, and provides an outlook for the upcoming week, including anticipated economic data releases and earnings reports.
Last Week at a Glance
Last week, the stock markets experienced wide swings, beginning with an early rally that pushed U.S. markets to new highs but later faltering, particularly in the tech sector, which has been a strong performer throughout much of 2024. This sector's decline dragged down the S&P 500 and Nasdaq, both of which closed lower for the week, while the Dow Jones Industrial Average posted a solid gain. The relationship between stock prices and interest rates evolved, with rates declining amid moderating inflation and expectations of Federal Reserve rate cuts, sustaining an uptrend in equities, especially in cyclical sectors and small-cap stocks. A noticeable shift in market leadership occurred as the tech sector faded and cyclical sectors gained momentum, reflecting confidence in a potential Fed rate cut and economic resilience. The evolving political landscape, with attention on the upcoming presidential election, also influenced market dynamics. Overall, the performance highlighted the importance of diversified investment portfolios and balancing different sectors and asset classes.
Top movers & shakers🎢
Several individual stocks made headlines with significant price movements driven by a variety of factors, including quarterly earnings reports, analyst ratings, and strategic announcements. Among the notable movers were:
CrowdStrike (CRWD): 🔐 Plummeted by 11% due to a global IT outage linked to its software update, causing significant disruptions across various industries, including aviation and healthcare. Despite the company identifying and fixing the issue, the incident had a considerable negative impact on its stock.
Palo Alto Networks (PANW): 🔒 Rose by 2%, benefiting from the issues faced by its competitor, CrowdStrike. Investors speculated that Palo Alto Networks could gain market share due to CrowdStrike's missteps, leading to a positive sentiment around PANW.
Starbucks (SBUX): ☕ Surged nearly 7% following reports that activist investment firm Elliott Investment Management had acquired a significant stake in the company. The news fueled optimism about potential strategic changes aimed at boosting the company's stock price.
Tesla (TSLA): 🚗 Fell by 4% after reports indicated that the company had halted some production due to the global IT outage. This added to the overall weakness in the tech sector, impacting Tesla's stock negatively.
Arm Holdings (ARM): 💻 Increased by 3% after Morgan Stanley upgraded the stock from equal weight to overweight. This upgrade was based on positive outlooks for the company's future performance, boosting investor confidence in Arm Holdings.
These movements illustrate the diverse factors influencing stock prices, from company-specific news to broader market trends. Investors should continue to monitor these and other key players as they navigate the evolving financial landscape.
The Week Ahead: July 22 - 26, 2024
The coming week is packed with important economic data releases that will be closely watched by investors and policymakers alike:
China's Rate Decision: Late Sunday, U.S. time, the People's Bank of China will announce its rate decision. The central bank is expected to leave its interest rate unchanged, according to a Reuters poll of analysts.
U.S. Housing Data: Early in the week, housing numbers will provide insights into a sector that has been a significant driver of inflation. Data on new home sales and existing home sales will be closely watched.
U.S. GDP (Q2): On Thursday, the U.S. government will release its initial estimate for second-quarter gross domestic product (GDP). This report will provide a comprehensive overview of the economy's performance in the second quarter.
PCE Inflation Data (June): On Friday, the Personal Consumption Expenditure (PCE) price index results for June will be released. This is the Fed's preferred inflation indicator and is expected to show continued progress in moderating inflation.
Key Earnings Reports:
Several major companies are set to report their quarterly earnings in the coming week, providing further insights into corporate health and sector performance:
Alphabet (GOOGL): 🔍 Scheduled to report on Tuesday after the bell, investors will be keen to see how the company has performed amid the broader tech sector's recent struggles. Insights into ad revenue, cloud services growth, and AI initiatives will be closely watched.
IBM (IBM): 💻 IBM is set to report earnings next week. As a major player in the technology sector, its results will be closely watched for insights into broader industry trends, including cloud computing, AI, and hybrid cloud strategy.
ServiceNow (NOW): ☁️ Reporting next week, ServiceNow's earnings will provide further information on the software and cloud services market. Investors will be interested in updates on subscription growth, customer retention, and new product offerings.
Texas Instruments (TXN): 🛠️ Set to report next week, Texas Instruments' earnings will offer a glimpse into the semiconductor industry's health and future prospects. Key areas of focus will include sales trends in automotive and industrial segments and inventory management.
Tesla (TSLA): 🚗 Tesla's earnings report will be highly anticipated, especially after the recent production halts. Investors will look for updates on production volumes, sales figures, and future outlook, particularly in light of recent IT outages and supply chain challenges.
Visa (V): 💳 Scheduled to report next week, Visa's earnings will provide insights into consumer spending trends and the financial sector's performance. Analysts will look for updates on transaction volumes, cross-border activity, and any guidance on future growth.
General Motors (GM) and Ford (F): 🚙 Both automakers are scheduled to report earnings next week, which will shed light on the automotive industry's recovery and challenges. Key areas of focus will include electric vehicle (EV) initiatives, supply chain issues, and sales performance.
Lockheed Martin (LMT): 🛡️ Reporting next week, Lockheed Martin's earnings will offer insights into the defense sector's performance and future contracts. Investors will be interested in updates on key defense programs, international sales, and any new government contracts.
Conclusion
The week of July 15 - 19, 2024, was marked by significant volatility in the financial markets, driven by sectoral shifts and evolving economic conditions. The tech sector's decline contrasted with gains in cyclical and small-cap stocks, reflecting a broader market rotation. Key events, including a global IT outage impacting several companies and ongoing political developments, added to the market's complexity. Looking ahead, investors will focus on critical economic data releases and major earnings reports from influential companies, which are expected to provide deeper insights into corporate health and sector performance.
Source:
https://www.schwab.com/learn/story/schwab-market-update
https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update
*Disclaimer:
This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.
