The S&P 500 Index gained over 2.5% last week as the market began digesting second quarter earnings season. The market was on a strong three-day win streak before retracing on Friday after it was made public that President Joe Biden tested positive for Covid-19 and several companies reported disappointing quarterly results. Cyclical sectors won the week as Consumer Discretionary, Industrials, and Materials were the top performing sectors. Of the 104 companies that have reported second quarter results, Consumer Staples and Health Care have had the largest average margin of beating EPS expectations. In aggregate, the average earnings beat among the companies that have reported is 4.2% which is higher than the 3.5% average beat from the first quarter, although there is still much of the index left to report which could move the figure up or down. The University of Michigan sentiment indicator released on two Fridays ago experienced a slight uptick from its historic low level in June as some investors believe the market has reached peak pessimism. Stocks with European exposure were buoyed on Friday as Russia reopened the Nord Stream pipeline of natural gas to Europe. Western Europe’s dependence on Russian natural gas has been exposed by the recent interruption and will incentivize them to diversify energy sources in the future. Mergers and acquisitions are hot topics once again as Twitter, Inc. was able to fast track their trial to enforce Elon Musk’s acquisition of the company and Amazon, Inc. announced an expansion into health care with the acquisition of One Medical. Bath & Body Works Inc. (BBWI, +21.7%) was the best performing stock in the index as several analysts reaffirmed the deep value of the beaten down stock despite management cutting 2022 EPS guidance during their quarterly call. AT&T (T, -10.5%) and Verizon (VZ, -12.9%) were two of the three worst performing stocks in the index as both companies issued disappointing guidance and were punished. Verizon’s one week decline was the worst since October 2008. In the busy upcoming week nearly half of the remaining S&P 500 companies will release their second quarter results, investors will hear news from the Federal Reserve meeting with likely a 75bps interest rate hike, and GDP data will be released that could mint a new technical recession if estimates from the Atlanta Fed are accurate and the reported figure is negative.