Telemus Weekly Market Review July 12th - July 16th, 2021
July 12 – July 16 Week in Review
Concerns around peak growth along with a rise in COVID-19 cases led a -1.0% decline in the S&P 500. The Dow Jones Industrial was the top performing index, declining by only -0.5%, while the NASDAQ composite retreated by -1.9%. Small Cap stocks were singled out, as the Russell 2000 index was down -5.1%, with investors moving toward more of a risk-off posture.
With second quarter earnings kicking off, investors began to grow concerned that both economic indicators and the growth rate in corporate earnings may be peaking. This created a more defensive stance to the market, as utilities, consumer staples and real estate were the best performing sectors within the S&P 500. Alternatively, energy, consumer discretionary and materials were the laggards.
Throughout the week, there was a notable preference for the largest capitalization stocks. Several of the largest names in the S&P 500, including Alphabet, Microsoft and Apple, delivered positive as investors appeared to seek out high quality, more consistent businesses. Other standouts included Moderna, which was added to the S&P 500, and Pepsi which rallied after posting better than expected earnings and raising its forecast for the year. Stocks with notable price declined included Boeing, which announced it would slow production on its 787 Dreamliner as well as Biogen, which fell on news around reimbursement pressure associated with its newly approved Alzheimer’s therapy.
During the week, Fed Chairman Jerome Powell spoke to both houses of congress as part of his semi-annual testimony. Chair Powell reiterated his stance that the economy has not recovered enough to begin scaling back the pace of bond purchases. This led to a rise in bond prices and a decline in yields, with the 10-year Treasury concluding the week at 1.29%, a 7 basis point decline in yield. The two-year Treasury held steady concluding the week at 0.22%. The risk-off feel of the equity market rubbed off on the bond market as well, as yield spreads in the corporate bond marketed rose slightly.
In other markets the dollar strengthened by +0.6% to 92.71. Crude oil gave up ground as West Texas Intermediate finished at $71.81, down -3.7%. Gold finished little changed at 1,814.50 a troy ounce. Lumber prices stood out last week as the July futures contract fell -23.6%. The precipitous fall to under $550 per thousand board feet, resulted in lumber closing at a level not seen since November of last year. Lumber had peaked at a price of over $1,600 in early May.
July 19 – July 23 Economic Calendar
- Monday
NAHB Housing Market Index
10:00 AM ET
- Tuesday
Housing Starts
8:30 AM ET
- Wednesday
MBA Mortgage Applications
7:00AM ET
- Thursday
Chicago Fed National Activity Index
8:30AM ET
Initial Jobless Claims
8:30AM ET
Existing Home Sales
10:00AM ET- Kansas City Fed Manufacturing Activity
11:00AM ET
- Friday
Market US PMI
9:45AM ET
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The S&P 500 index includes 500 leading companies in the US and is widely regarded as the best single gauge of large-cap US equities. The Dow Jones Industrial Average (DJIA) is a widely-watched benchmark index in the U.S. for blue-chip stocks; it is a price-weighted index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the NASDAQ. The Nasdaq Composite Index is a large market-cap-weighted index of more than 2,500 stocks, American depositary receipts (ADRs), and real estate investment trusts (REITs), among others. The Russell 2000 index measures the performance of approximately 2,000 smallest-cap American companies in the Russell 3000 Index.
An index is not a security in which an investment can be made, as they are unmanaged vehicles that serve as market indicators only and do not account for the deduction of management fees and/or transaction costs generally associated with investable products. It should not be assumed that portfolio holdings will correspond directly to the comparative index benchmark shown above. The holdings and performance of Telemus client accounts may vary widely from those of the presented indices. Advisory services are only offered to clients or prospective clients where Telemus and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Telemus unless a client service agreement is in place. All composite data and corresponding calculations are available upon request.
Matt joined the Telemus team in 2018. As Chief Investment Officer, he leads the firms the investment process and research effort. Matt has experience as an equity analyst and portfolio manager and has advised corporate pension plans on their manager selection. He’s been quoted in Money Magazine and Barron’s.
