The CML Close - Stocks up, GDP down, jobless claims rise, Apple and Amazon rise after hours on earnings - 07-28-2022
Markets
Stocks rose off of yesterday's gains after the Q2 GDP report showed a negative reading putting the US into 'technical recession' with back to back quarters of negative GDP growth. Bulls appear to believe this will cause the Fed to soon slow down the pace of interest rate hikes.
Still, Fed watchers believe the market has it wrong and that the rally is misplaced. Jobless claims climbed again.
Apple and Amazon delivered strong results are both stocks were higher initially after hours.
| • SPX | 4,072.43 | +48.82 | (+1.21%) |
| • NASD | 12,162.59 | +130.17 | (+1.08%) |
| • DJIA | 32,259.63 | +332.04 | (+1.03%) |
| • R2K | 1,873.03 | +24.69 | (+1.34%) |
| • VIX | 22.59 | -0.95 | (-4.09%) |
| • Oil | 97.14 | -0.12 | (-0.12%) |
• Preliminary readings of Q2 US GDP were negative, potentially falling for the second straight quarter after the negative Q1 results.
• Jobless claims continue to climb, while still well below prior equilibrium levels.
• Apple (NASDAQ: AAPL) beats on revenue and profit, expects growth to accelerate despite 'pockets of softness'
• Amazon (NASDAQ:AMZN) sales were up 7% in the latest quarter and its cloud division (AWS) revenue rose 33%, topping estimates. Shares jumped on the news.
• The Senate appears to have narrowly reached a deal on taxes and energy.
• The strong US dollar is turning into a global problem.
Headlines of the Day
Stocks Rise as GDP Report Confirms 'Technical Recession'
Recent gains have been driven by the narrative that the Federal Reserve will soon slow down the pace of interest rate hikes.
Fed Watchers Say Markets Got It All Wrong on Powell ‘Pivot’
Federal Reserve Chair Jerome Powell is raising interest rates at the steepest pace in a generation and he said Wednesday that another big increase is possible. Yet investors sent stocks surging on his comments that the hikes will eventually slow.
The Strong Dollar Is Wreaking Havoc Globally — And It’s Just Getting Started
Dollar propelled higher by Fed hikes, fear of global recession. 'No kryptonite' to blow up greenback's strength any time soon.
Fed’s Powell Offers Less Guidance and More Hope for Investors—for Now
Jerome Powell is vowing to say less about future interest-rate moves but his comments alongside the latest hike went down well with investors all the same.
Manchin, Schumer Reach Surprise Deal on Energy, Taxes
Sen. Joe Manchin said Wednesday he has a deal with party leaders on a spending package that includes funding for energy and climate programs, reining in healthcare costs, and tax increases to pay for it in a dramatic reversal of events.
Economic Data Results for 7-28-2022
United States GDP Growth Rate
The American economy shrank an annualized 0.9% on quarter in Q2 2022, following a 1.6% drop in Q1 and technically entering a recession, the advance estimate showed. Most investors were expecting a 0.5% growth although some were betting on a negative reading.
United States Jobless Claims 4-week Average
Jobless Claims 4-week Average in the United States increased to 249.25 Thousand in July 23 from 243 Thousand in the previous week.
Initial Jobless Claims 23/JUL
The number of Americans filing new claims for unemployment benefits dropped by 5 thousand to 256,000 the week that ended July 23rd, above market expectations of 253,000.
United States Real Consumer Spending QoQ
Final personal consumption expenditure in the United States grew by 1.0 percent in the second quarter of 2022, easing from a 1.8 percent increase in the previous three-month period, a first preliminary reading showed.
Economic Data Due Tomorrow on 7-29-2022
PCE Price Index MoM JUN and YOY
Core PCE Price Index YoY JUN
United States Employment Cost Index QoQ
Michigan 5 Year Inflation Expectations Final JUL
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