John Hancock: Weekly Market Recap Week Ended July 16th
As of Friday, 85% of the S&P 500 companies that had reported second-quarter results exceeded analysts’ earnings estimates, according to FactSet. That so-called beat rate ranks above the 75% five-year average. Results were in from 8% of S&P 500 companies as of Friday, with many of the early reports coming in from major banks.
Inflation spike persists
A monthly measure of U.S. consumer prices rose at the fastest pace since 2008. June’s Consumer Price Index rose 5.4% from the same period a year earlier, surprising many economists who had expected the recent spike in inflation to moderate.
As earnings season got under way, the major U.S. stock indexes retreated slightly from the record highs they had set the previous week. The Dow slipped around 0.5%, the S&P 500 fell about 1.0%, and the NASDAQ declined 1.9%.
In the wake of the latest monthly report showing rising inflation, Federal Reserve Chairman Jerome Powell told a congressional panel that the central bank wouldn’t hesitate to lift interest rates to try to control rising prices. However, Powell repeatedly emphasized that he still expects price pressures to ease later this year.