Stocks rose sharply on Friday, notching the fourth consecutive positive week for the S&P 500 as investors celebrated signs that inflation could peak. The main fundamental driver of this week’s rise was weaker than expected July CPI and PPI data, providing further support for the peak inflation narrative. On Friday, import prices also fell more than expected.
The market also managed to push higher despite a recent batch of corporate updates that match expectations of a more meaningful earnings reset. The Dow Jones Industrial Average added 1.27%. The S&P 500 gained 1.73% to end and the Nasdaq Composite jumped 2.09%. The S&P 500 rose 3.26% on the week, marking its longest weekly winning streak since November 2021. The Dow Jones rose 2.92% on the week, while the Nasdaq Composite rose 3, 08%.
In Australia this week, a big test of the recovery in local investor sentiment and confidence looms in the form of Australia’s mid-June earnings season, which is in full swing this week with around 60 major companies revealing their findings, led by BHP (ASX: BHP) tomorrow.
Meanwhile, the dying embers of June’s U.S. earnings season see some major U.S. retail stock reports this week, with the most anticipated numbers from retail giant Walmart on Tuesday evening Sydney and Target, number two, the next day. Costco’s quarterly results will be released on Thursday.
Food inflation in the United States hit 10.9% in July, the highest since May 1979. The fear is that this will affect customers’ ability to spend on general merchandise categories and force retailers to further cut their inventory, especially clothing.
In the United States on Friday, all sectors were up, including energy, despite the fall in the price of oil. Big tech, semi-finished, autos, asset managers, managed care and precious metals were among the most notable.
It should be noted that the United States House of Representatives on Friday passed a sweeping tax, health and climate bill, delivering a major victory for Democrats and President Joe Biden less than three months before the crucial election. mid-term. The Climate, Taxes and Healthcare Bill passed by the House includes a $7,500 tax credit for Americans who buy electric vehicles.
There is just one small problem. To benefit from the credit, electric vehicles must:
- Be assembled in North America
- Have at least 50% of its battery components sourced from North America by 2024 and 100% by 2028. Electric vehicles will also have to meet new battery mineral supply thresholds.
Of course, many of the materials that go into an electric vehicle, such as rare earth metals, are not currently produced in the United States. They come from places like China, the Democratic Republic of Congo and Myanmar – places the United States is not particularly keen on trading with in the future. This is the problem Australian resource companies are looking to solve moving forward.
SPI futures are pointing up 39 points.
The US dollar index rose 0.5% but ended lower for the week.
An Australian dollar at 7:10 a.m. strengthened against the US dollar on Friday, buying 71.21 US cents (Fri: 71.10 US cents), 58.68 British pence, 95.07 yen and 69.43 US cents. ‘euro.
Over the past 24 hours, Bitcoin lost 0.61% to $24,353.88.
Iron ore futures point to a 0.2% gain.
Gold gained $8.30 or 0.46% to US$1,815.50 an ounce.
Silver is up $0.35 or 1.69% at US$20.85 an ounce.
Copper fell $3.80 or 1.03% to US$366.85 per pound.
Oil fell $2.25 or 2.38% to US$92.09 a barrel.
Oil prices fell about 2% on Friday on expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term, while recession fears clouded the outlook for the request.
Numbers around the world
Across the Atlantic, European stock markets closed higher on Friday. Paris gained 0.1%, Frankfurt gained 0.7% and London’s FTSE closed up 0.5%.
Asian markets closed on a mixed note. Tokyo’s Nikkei gained 2.6%, Hong Kong’s Hang Seng gained 0.5% and China’s Shanghai Composite closed down 0.2%.
On Friday, the Australian stock market closed down 0.5% or 38 points at 7,033.
Three companies are ready to trade without the right to a dividend.
QV Actions (ASX: QVE) pays 1.2 cents fully franked
Scentre Group (ASX:SCG) pays 7.5 cents unstamped
WOTSO property (ASX:WOT) pay 3 unstamped cents
Two companies are ready to pay eligible shareholders today.
NB Global Corporate Income Trust (ASX: NBI)
Qualitas Real Estate Income Fund (ASX:QRI)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.