What happened in the markets: 22 July - 26 July 2024
Aries Yuangga, Wakil Penasihat Berjangka
The past week was marked by significant rotations in both equity markets and politics. Investors witnessed a shift away from mega-cap technology stocks towards small- and mid-cap stocks, along with value and cyclical sectors. On the political front, President Biden's decision to exit the race has introduced new dynamics into the upcoming election, adding to market volatility. This article will delve into the market movements, top-performing stocks, and the anticipated events for the coming week.
Last Week at a Glance
Last week saw the continued momentum from previous market rotations, with mega-cap technology stocks lagging as value and cyclical sectors, including small- and mid-cap stocks, outperformed. This shift was driven by cooling inflation, with July’s CPI inflation at 3.0% year-over-year, leading to expectations of Federal Reserve interest rate cuts. Robust second-quarter earnings in financials, energy, and healthcare sectors also played a role, while high valuations in the tech-heavy Nasdaq index prompted investors to seek better opportunities. Politically, President Biden's exit from the race and endorsement of Vice President Kamala Harris narrowed the gap with frontrunner Donald Trump, adding uncertainty and potential market volatility.
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:
3M Co. (MMM): 🏭 Surged nearly 24% after reporting better-than-expected quarterly results and raising its full-year earnings forecast. This marks a turnaround for the company, which had been struggling with lawsuits related to "forever chemicals" and military earplugs.
Aon (AON): 📊 Jumped 7.7% after the British professional-services company reported strong quarterly results.
Bristol-Myers Squibb (BMY): 💊 Rose more than 11% following its better-than-expected quarterly results and an improved full-year forecast.
Coinbase Global (COIN): 💰 Benefited from a 5% rise in its stock price, driven by Bitcoin's 3% increase to $67,481.80.
Colgate-Palmolive (CL): 🪥 Gained 3% after reporting strong quarterly results and raising its year-end forecasts.
Dexcom (DXCM): 📉 Dropped 41% after missing its revenue estimates and lowering its full-year forecast.
The week also saw notable movements in the broader indexes. Despite Friday's gains, the S&P 500 Index lost 0.8% for the week, and the tech-heavy Nasdaq Composite was down 2.1%. The Dow Jones Industrial Average fared better, rising 0.8%, while the small-cap Russell 2000 outperformed with a 3.3% gain.
The Week Ahead: July 29 - August 02, 2024
The coming week is packed with important economic data releases that will be closely watched by investors and policymakers alike:
FOMC Meeting: The Federal Open Market Committee (FOMC) will meet on Tuesday and Wednesday. Investors widely expect the Fed to keep interest rates unchanged, but the focus will be on any signals regarding future rate cuts.
Nonfarm Payrolls Report: The July nonfarm payrolls report, set to be released on Friday, will provide insights into the labor market's health. A strong jobs report could influence the Fed's future rate decisions.
Jobless Claims: The weekly jobless claims report on Thursday will be closely watched for any signs of labor market weakness.
Personal Consumption Expenditures (PCE) Price Index: The PCE price index, the Fed's preferred inflation gauge, will also be released, providing further insights into inflation trends.
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:
McDonald's (MCD): 🍔 Set to report on Monday, investors will be looking for insights into consumer spending trends.
Microsoft (MSFT) and Starbucks (SBUX): 💻☕ Both companies are scheduled to report on Tuesday. Microsoft's results will be particularly scrutinized for any impact from the broader tech sector's performance, while Starbucks will provide insights into consumer behavior and retail trends.
Boeing (BA), T-Mobile US (TMUS), and Mastercard (MA): 🛫📱💳 These companies will report on Wednesday. Boeing's results are likely to be influenced by its production and delivery schedules, T-Mobile's by its subscriber growth and network expansion, and Mastercard's by transaction volumes and consumer spending trends.
Apple (AAPL), Amazon (AMZN), and Intel (INTC): 📱🛒💻 On Thursday, these tech giants will report their earnings, and their performance could set the tone for the tech sector in the coming weeks. Apple's results will be watched for product sales and services growth, Amazon for its e-commerce and cloud services performance, and Intel for semiconductor industry trends.
Conclusion
The past week was characterized by significant market rotations and political shifts, leading to volatility and diverse stock movements. Mega-cap tech stocks lagged as small- and mid-cap, value, and cyclical sectors gained. Key drivers included cooling inflation, robust earnings in non-tech sectors, and valuation adjustments. Politically, President Biden's exit and endorsement of Kamala Harris added uncertainty to the upcoming election. The upcoming week promises crucial economic data and earnings reports, which could further influence market sentiment.
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.
