US Stock Markets Week Ended July 26, 2019

 
Last week the S&P 500 Index closed at an all-time high on Wednesday and then again on Friday. Equities continue to perform well as the U.S. economy remains strong. 2Q U.S. GDP was announced to be 2.1% despite Bloomberg's survey of economists expecting 1.8%. While this is below 3.1% from 1Q19, in the 42 quarters since 2008 there have been 19 lower GDP measures. Meanwhile Personal Consumption remains robust and inflation muted. Additionally, a rate cut from the Federal Reserve is expected on Wednesday of next week, which has been fueling equities as the era of low-cost borrowing appears to be continuing. Earnings season continued this week as 150 names in the S&P 500 Index announced quarterly results. Twitter Inc. announced they added 5m active users and increased their full year revenue guidance by 10% to $875m, the stock was up nearly 9% Friday as a result. The parent corporation of Google announced 2Q revenues of $31.7b, topping estimates. They also announced increased headcount (an indication of future growth) and margin improvement to 24%. Google's shares returned 10.5% for the week as a result of their strong announcement. Starbucks Corp. rallied nearly 10% last week after they announced revenue and earnings above expectations and announced over 50% of their beverages sold were cold, further showing the diversity of their revenue stream. Not all was rosy as Align Technology Inc. plummeted nearly 30% last week after lowering revenue guidance which caused sell side analyst to downgrade the stock and slash price targets. The Boeing Co. fell over 8% after they announced earnings that continue to have financial pressure from their 737 Max planes that are out of service. Their commercial airplane revenue was down 66% and deliveries down 54% as orders are frozen until the planes are fixed. Looking ahead to next week, earnings season continues as 168 companies in the S&P 500 Index are expected to release quarterly results.
Posted on Monday, July 29, 2019 @ 8:25 AM

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.