John Hancock: Weekly Market Recap Week Ended July 12th
Eyes on earnings
Corporate earnings could dampen stock market euphoria, as 77% of the companies that have issued second-quarter forecasts projected negative earnings per share growth. Analysts now expect earnings to decline by 2.9% versus a year ago, as slower growth and the cost of tariffs on U.S. businesses are tallied.
Trade back on track
U.S.-China trade talks appeared set to resume after the countries’ presidents reached a go-ahead agreement. However, China’s late-week edict to impose new sanctions on the United States could slow progress.
In two days of testimony on Capitol Hill, Fed Chairman Jerome Powell signaled a pending interest rate cut, citing trade tensions and concerns around the U.S. and global economies as contributing factors. Stocks surged on the prospect of the first rate cut since 2009.
Major indexes rallied to new highs, with all three setting records during the week. The Dow Jones ended the week at 27,332, up 1.5%. The S&P 500 hit 3,013, while the NASDAQ topped 8,244—a bump-up of around 1.0% for each index.