Winthrop Partners Market and Economic Update 7-26-21

The Markets (as of market close July 23, 2021)
Last week proved to be a choppy one for stocks. The week began with stocks trending lower on news of a spike in the number of coronavirus cases. However, strong corporate earnings reports helped support the perception that the economy is continuing to advance, despite the cloud of the Delta variant hanging overhead. By last Friday, both the Nasdaq and the S&P 500 reached record highs, with megacap tech stocks helping drive the indexes upward. The Nasdaq gained 2.8% to lead the major benchmark indexes, followed by the Russell 2000, the S&P 500, the Dow, and the Global Dow. Yields on 10-year Treasuries dipped 2.0 basis points lower, while the dollar and crude oil prices each ended the week higher. Gold prices, which had been climbing, took a slight step back, falling about 0.5%.

Stocks slumped last Monday to begin last week as a spike in coronavirus cases, both domestically and abroad, put a damper on the economic recovery. Investors shied away from stocks and moved toward bonds, driving prices higher and yields lower. Each of the market sectors fell, led by financials, industrials, and materials. The S&P 500 dropped the most in two months, the Dow had its largest decline since October, while the small caps of the Russell 2000 continued to sink, falling nearly 10% since peaking in March. The CBOE Volatility Index, which had been relatively steady for several sessions, soared nearly 22.0%. Crude oil prices fell 7.4% to $66.51 per barrel — the first time prices fell below $70.00 per barrel since early June, after major oil-producing countries agreed to boost supply into 2022.

Wall Street closed higher last Tuesday, rebounding from a multi-session losing streak. Several strong corporate earnings reports helped renew investor optimism, at least temporarily, in a reviving economy. Each of the benchmark indexes posted solid gains, led by the Russell 2000 (3.0%), which enjoyed its first positive session since July 12. The Dow and the Nasdaq each gained 1.6%, followed by the S&P 500, which advanced 1.5%, and the Global Dow, which gained 1.0%. Industrials, financials, and real estate headed the sectors, with only consumer staples dipping modestly. The yield on 10-year Treasuries reversed course from last Monday, climbing to 1.20%. The dollar and crude oil prices also advanced by the close of trading.

Stocks advanced for the second straight day last Wednesday. Robust corporate earnings reports helped fuel renewed optimism in the economy, despite increasing coronavirus cases and inflation. The Russell 2000 again led the indexes, climbing 1.7%, followed by the Global Dow (1.5%) and the Nasdaq (0.9%). Both the Dow and the S&P
500 gained 0.8%. Energy shares advanced 3.5%, and financials increased 1.7%. Crude oil prices climbed back above $70.00 per barrel. The dollar dipped, while the yield on 10- year Treasuries jumped 7.1 basis points to 1.28%.
Equities closed last Thursday mostly higher, with only the Russell 2000 losing ground among the benchmark indexes. Technology led the market sectors, with health care, consumer discretionary, and communication services also advancing. Energy and financials both fell more than 1.0%. Treasury yields dipped lower, while the dollar and
crude oil prices rose higher.

Another round of robust corporate profits helped push stocks to record highs last Friday. Surging earnings are reflecting an ongoing rise in economic activity, possibly allaying fears that stocks are overvalued. The Nasdaq and the S&P 500 each gained 1.0%, while the Dow (0.7%), the Russell 2000 (0.5%), and the Global Dow (0.4%) also finished the day ahead. Yields on 10-year Treasuries, the dollar, and crude oil prices advanced. Communication services led the sectors, increasing 2.7%.

The national average retail price for regular gasoline was $3.153 per gallon on July 19, $0.020 per gallon higher than the prior week’s price and $0.967 more than a year ago. Gasoline production decreased during the week of July 19, averaging 9.1 million barrels per day, down from the prior week’s average of 9.9 million barrels per day. U.S. crude oil refinery inputs averaged 16.0 million barrels per day during the week ended July 16; this was 87,000 barrels per day less than the previous week’s average. For the week ended July 19, refineries operated at 91.4% of their operable capacity, down from the prior week’s level of 91.8%.  Click here for the full article: Market-Flash 7-26-21