After setting new record highs two weeks ago, the markets retreated modestly last week. Overall, the second half of July saw slight gains in several of the major indices with modest losses in the other.
Volatility returned to the market on July 19th as fears over the Delta Variant of COVID-19 led to a huge drop across all major markets. Fears over a slowing economy with growing inflation fueled concern over stagflation. However, the market drop was short-lived and stocks rebounded quickly.
Earnings reports continue to greatly exceed expectations. Our last FWIW Newsletter reported the expected jump in earnings to be 69%. Although it has yet to conclude, the expected increase will likely top 85% -- which would mark the highest year-over-year earnings growth since the fourth quarter of 2009.
Current market concerns center around the continued rise in cases of the Delta variant of COVID-19. Markets are also closely eyeing inflation numbers and the continued reopening of our economy. While earnings reports continue to show significant growth, expectations moving forward are much more modest.
As on July 30th, the NASDAQ Composite Index (NASDAQ) rose by 130 points (0.89%). The S&P 500 also showed positive returns, increasing by 35 points (0.81%). The Dow Jones Industrial Average (Dow) dropped 52 points (0.15%).