John Hancock: Weekly Market Recap Week Ended July 24th
Although they’re in sharp decline, second-quarter earnings are coming in a bit better than expected, based on results from the roughly one-quarter of S&P 500 companies that had released numbers as of Friday. FactSet projects a quarterly earnings decline of about 42%, compared with the 44% drop that it had projected a week earlier, based on companies that have already released earnings combined with projections of upcoming releases.
The U.S. housing market is posting record month-to-month growth after falling sharply in the spring as a result of the coronavirus pandemic. Sales of existing homes jumped 21% in June, compared with the previous month, according to the National Association of Realtors. That’s the largest monthly increase since tracking of the data began in 1968.
The yield of the 10-year U.S. Treasury bond fell on Thursday to the lowest level in three months, dropping to 0.58%. The recent decline in yields is a key reason why mortgage rates have been setting record lows, providing support for the housing market
The U.S. government’s initial report Thursday on second-quarter GDP is likely to be the most closely watched economic release of the week. Economists’ estimates vary widely because of the uncertainty from COVID-19. In this year’s first quarter, GDP shrank by 5.0%, the worst since late 2008.