Stocks End Mixed in Volatile Session, Tech Leads
4:17 pm Wednesday, July 28th, 2021
U.S. stocks edged higher on Wednesday and the dollar slipped into losses after the Federal Reserve said the economic recovery was on track but offered no clues about when monetary policy will eventually be tightened.
The earnings lineup between yesterday’s close and today’s open included some high-profile names: Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Boeing (BA), McDonald’s (MCD), and AMD (AMD).
The results were better than expected, which was unsurprising to many investors, and the mixed reactions are feeding into the narrative that earnings growth could be peaking. AMD, however, is up 7% partly because it raised its revenue guidance and sounded upbeat on continued growth prospects.
Fittingly, the sectors are mirroring the mixed state of earnings reactions. Six of the 11 S&P 500 sectors trade lower while five sectors trade higher. The communication services (+0.9%) and energy (+0.7%) sectors are in the lead, while the utilities (-1.3%), consumer staples (-0.9%), and real estate (-0.8%) sectors slip into the laggard positions.
The market is sitting tight in front of the Fed, which like earnings, market participants seem to know what to already expect. The central bank is expected to leave rates near zero and the pace of asset purchases unchanged while describing inflation pressures as transitory.
We’ll see what the Fed says about tapering asset purchases, but there doesn’t seem to be any angst about an unwelcomed surprise since the hedging premium has decreased. The CBOE Volatility Index was trading back below 19.00.
