US Stocks Jump To Record High on GDP, Jobs Data
4:10 pm Thursday, July 29th, 2021
The S&P 500 and Dow Jones Industrial Average (+0.6%) have set all-time highs in a pro-cyclical trade, as the market continues to attract buying interest following the Fed’s dovish-sounding tone yesterday. The Nasdaq Composite is up 0.3% while the Russell 2000 outperforms with a 1.2% gain.
Besides the Fed, positive factors today include 1) another round of mostly better-than-expected earnings news and better-than-feared guidance, 2) advance Q2 GDP increasing at an annual rate of 6.5% (Briefing.com consensus 8.5%) even though it was below expectations, and 3) hope that the Senate can pass the $1 trillion bipartisan infrastructure bill.
The gains have spread to ten of the 11 S&P 500 sectors, with the energy (+1.3%), materials (+1.3%), financials (+1.4%), consumer discretionary (+0.9%), and industrials (+0.9%) sectors up around 1%. The communication services sector (-0.7%) is the only sector trading lower amid weakness in Facebook (FB) following its earnings report.
Facebook, like PayPal (PYPL) and Merck (MRK), lowered investor expectations. Briefly, Facebook said it expects revenue growth rates to decelerate significantly yr/yr in the coming quarters due to tough comparisons and to decelerate modestly versus 2019. PYPL and MRK issued below-consensus EPS guidance.
MasterCard (MA), Comcast (CMCSA), Qualcomm (QCOM), Ford Motor (F), and Yum! Brands (YUM) are among the earnings winners today.
Amazon.com (AMZN) is limping into its earnings report after the close given the negative reactions to the mega-cap earnings this week.
Separately, Robinhood’s (HOOD) public debut is off to a disappointing start. HOOD opened at $38 per share, matching its IPO price, but it’s since dropped 11% to below $34 per share. It’s worth noting that there hasn’t been a noticeable shift in overall risk sentiment because of HOOD.
