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Bob Carey
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  US Stock Markets Ended July 16, 2021
Posted Under: Weekly Market Commentary

The S&P 500 index closed at an all-time high on Monday but traded lower the rest of the week to post a -0.96% return last week. The Consumer Price Index was released up 0.9% for the month of June and up 5.4% year-over-year. Both exceeded economist expectations. However, portions of the headline inflation were in areas that are considered temporary. For instance, used car and truck prices were up 10.5% in the month of June, primarily due to a restricted supply of semiconductors used to make new cars hampering new car production. This type of inflation is likely temporary, or transitory, in nature until supply lines catchup to economic demands post COVID shutdowns. Later in the week, Taiwan Semiconductor Manufacturing Company, the world's largest semiconductor manufacturer, announced they expect the automotive chip shortage to start easing over the next few months. They expect to increase microcontrollers by 60% in 2021 compared to 2020 but could see the overall semi shortage lasting into 2022. Financial markets are still struggling to digest just how much of the headline inflation is transitory and how much is fueled by the growing US money supply. OPEC+ struck an oil production deal after a standoff between the UAE and Saudi Arabia was negotiated. Oil closed near multi-year highs at $75.25 on Tuesday but after the deal was struck the price of oil sold off to close the week at $71.81. Earnings season began in earnest last week after the five largest US banks announced quarterly results. JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co., Citigroup Inc. and Goldman Sachs Group Inc. all reported strong quarterly results and offered outlooks that continue to show a strong U.S. economy. Looking ahead to next week, earnings season is scheduled to continue as bellwether names Johnson & Johnson, The Coca-Cola Co., Netflix Inc., Verizon Communications Inc. and Intel Corp. are all expected to report quarterly results.
Posted on Monday, July 19, 2021 @ 8:08 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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