Closing Stock Market SummaryFor the last session in July, the market opened higher mostly thanks to better-than-feared quarterly results from Apple (AAPL 162.51, +5.16, +3.2%) and Amazon.com (AMZN 134.95, +12.67, +10.3%). Each of the main indices lost a little steam and traded sideways through midday before finding upside momentum and climbing to close near fresh highs.
The strong start to the day was thanks to favorable quarterly results, but also carryover momentum from this week's rally. Week-to-date the S&P 500, Dow Jones Industrial Average, and Nasdaq gained 4.3%, 3.0%, and 4.7%, respectively.
Trading up in solidarity with Apple and Amazon, the mega caps were an important upside driver today. The Vanguard Mega Cap Growth ETF (MGK) closed up 2.3% versus a 0.9% gain in the Invesco S&P 500 Equal Weight ETF (RSP) and a 1.4% gain in the S&P 500.
S&P 500 sector performance was driven by constituents' quarterly results. Consumer discretionary (+4.3%) and information technology (+1.6%) outperformed thanks to Apple and Amazon but the technology sectors' gains were muted due to Intel's (INTC 36.31, -3.40, -8.56%) disappointing results and guidance.
The energy sector (+4.5%) closed at the top of the leaderboard thanks to Exxon (XOM 96.93, +4.29, +4.6%) and Chevron (CVX 163.78,+13.39, +8.9%) after both companies reported better-than-expected results ahead of the open.
The only two sectors to close in negative territory were health care (-0.4%) and consumer staples (-0.7%). The former was dragged down by Dexcom (DXCM 82.08, -4.91, -5.6%) after it reported worse-than-expected earnings and issued downside guidance. The latter had Church & Dwight (CHD 87.97, -8.24, -8.5%) and Procter & Gamble (PG 138.91, -9.15, -6.18%) to thank for its underperformance. Both companies issued downside guidance before the open.
Separately, there was a batch of discouraging economic data today that included the highest PCE Price Index reading (+6.8% yr/yr) since 1982, the second-lowest consumer sentiment number on record (51.5), and the lowest Chicago PMI reading (52.1) since August 2020.
Also, Energy complex futures made upside moves today. WTI crude oil futures rose 2.1% to $98.55/bbl while Natural gas futures rose 2.8% to $8.32/mmbtu.
The Treasury market closed mixed with the 2-yr note yield rising two basis points to 2.90% while the 10-yr note yield fell four basis points to 2.64%.
Looking ahead to Monday, market participants will receive the July IHS Markit Manufacturing PMI Final reading (prior 52.3%) at 9:45 a.m. ET. The July ISM Manufacturing Index (consensus 52.5%; prior 53.0%) and June Construction Spending ( consensus 0.2%; prior -0.1%) at 10:00 a.m. ET.
Reviewing today's economic data:
- June Personal Income 0.6% (consensus 0.5%); Prior was revised to 0.6% from 0.5%;June Personal Spending 1.1% (consensus 0.8%); Prior was revised to 0.3% from 0.2%; June PCE Prices 1.0% (consensus 1.0%); Prior 0.6%; June PCE Prices - Core 0.6% (consensus 0.6%); Prior 0.3%
- The key takeaway from the report, other than inflation remaining sticky, is that the inflation sapped the consumer's purchasing power. Real personal spending was up a weak 0.1% as real disposable personal income declined 0.3%.
- Q2 Employment Cost Index 1.3% (consensus 1.1%); Prior 1.4%
- The key takeaway from the report is that workers saw a nice increase in wages and salaries in Q2, yet that increase was subsumed by inflation, evidenced by the 7.1% increase in the Q2 PCE Price Index seen in the Advance Q2 GDP report.
- July Chicago PMI 52.1 (consensus 56.2); Prior 56.0
- July Univ. of Michigan Consumer Sentiment - Final 51.5 (consensus 51.1); Prior 51.1
- The key takeaway from the report is that consumer sentiment remains near record-low levels amid persistent worries about inflation and growing worries about a softening labor market.
- Dow Jones Industrial Average: -9.6% YTD
- S&P 400: -11.6% YTD
- S&P 500: -13.4% YTD
- Russell 2000: -16.0% YTD
- Nasdaq Composite: -20.7% YTD