US Stock Markets Ended August 20, 2021

 
Equities ended the week lower, weighed down by losses from economically-sensitive companies as global growth concerns mount due to Covid-19 infections. Renewed lockdowns in China and other foreign countries could stretch supply chains already under pressure. In addition, continued high inflation readings and the Federal Reserve signaling they could soon begin to taper led to a risk-off sentiment. Retail sales for July fell by 1.1% due to a rise in cases from the Delta variant and waning fiscal support. While economic datapoints are likely to remain choppy in the near-term due to inventory, supply chain and labor shortages, corporate profits continue to surge. S&P 500 profits for the 2nd Quarter grew by over 85% with 97% of firms reporting. The average company in the S&P 500 beat earnings expectations by over 15% versus a historical average around 5%. Several retailers reported results this week with Walmart Inc., Kohl's Corp. and Macy's Inc. all reporting blowout results. In technology, Applied Materials Inc. reported strong results and guidance as long-term wafer demand remains elevated. Nvidia Corp also delivered robust results on strength within the data center. For the week ahead, traders will be focused on Jackson Hole, which could provide clues to the Federal Reserve's timeline for tapering. Despite a possibly less accommodative Fed, equities could continue to hit new-highs due to the lack of alternatives to stocks, especially if earnings surprises remain above historical averages.
Posted on Monday, August 23, 2021 @ 8:17 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.