S&P 500 close at record highs
The Dow Jones Industrial Average and the S&P 500 both closed at record highs ahead of key retail earnings reports.
Unexpectedly, from a pandemic low on March 23, 2020, the S&P 500 has already doubled. An analysis of S&P 500 Global data by CNBC found that the 100% rebound is the fastest since WWII.
The S&P 500 rose 0.2 percent to 4,479.71. It rose 110.02 points, or 0.3 percent, to 35625.40. The Nasdaq Composite Index fell 0.2% to 14,793.76.
S&P 500 effect on big company retail stocks
Retail stocks rose ahead of big companies’ quarterly results. Firms like Home Depot and Walmart rose 1.1% and 0.8% respectively ahead of Tuesday’s earnings report, whilst Target and Lowe’s both rose ahead of Wednesday’s earnings.
In early Monday trading, the major US market indices fell on concerns about slowing global growth, when they started noticing great drops in oil prices.
Data show China’s economic growth slowed more than expected. In July, China’s retail sales rose 8.5% year on year, missing the 11.55% forecast by Reuters. Online sales increased 4.4% month-on-month. The nation’s industrial output increased by6.4%, less than the 7.8% expected.
“The economic recovery remains fragile and unequal,” said the National Bureau of Statistics of China.
As reported by CNBC’s Jim Cramer. “I’m not sure yet.”
Following the release of Chinese GDP figures, oil prices were reduced. In the US, WTI crude oil prices also fell, putting pressure on energy stocks. Stocks in Occidental Petroleum fell 3.8%, Exxon Mobil and Chevron each fell over 1%.
US Markets as a result of high S&P 500
In the US, the 10-year Treasury yield fell to 1.26 percent Monday afternoon as investors worried about global growth. It seems that the bond yields are falling as bond prices rise.
The 10-year yield fell with bank stocks, such as Bank of America decreasing by 0.8%, JPMorgan by 0.6%, and Goldman Sachs by 0.6%.
Tesla’s stock also dropped 4.3 percent after the National Highway Traffic Safety Administration announced an investigation into its Autopilot semi-autonomous driving system. As for Moderna, shares fell over 4% after gaining over 250 percent this year.
US markets also fell as the Federal Reserve’s bond-buying program was slated to be reduced in September. Interviews with banking officials and public statements show rising support for a faster tapering pace than markets expected a month ago.
The main stock indexes have been rising for most of the month on the back of corporate earnings reports. The S&P 500 has closed at a record high 49 times this year, or 31% of the time, the most typical closing highs since 1950.
According to FactSet, 87 percent of S&P 500 companies reported better second-quarter earnings per share. At 87%, this will be the highest percentage of S&P 500 companies to report positive earnings per share surprises since FactSet began tracking this indicator in 2008.
“August is the month of low volume and aimless volatility,” Raymond James’ Tavis McCourt wrote in a note.
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