The S&P 500 index rose 0.9% last week, trading near records, despite the mixed inflation data and bank earnings. The index is now up 2.8% in July and 18% this year.
Inflation data last week showed US consumer prices declined as forecast last month while June producer prices rose more than expected.
The consumer price index slipped 0.1% in June, even as analysts were expecting a 0.1% increase. Annually, consumer price inflation slowed to 3% last month from the prior month’s 3.3%, cooling more than the 3.1% Wall Street consensus.
The US producer price index increased 0.2% in June on a seasonally adjusted basis, compared with the Bloomberg-polled consensus for a 0.1% gain. The producer price index climbed 2.6% annually, accelerating from May’s 2.4% growth and exceeding the 2.3% pace that analysts were projecting.
The Q2 earnings season began on Friday with reports from JPMorgan Chase, Wells Fargo and Citigroup. All three posted Q2 earnings and revenue above analysts’ mean estimates, but investors still found reasons for concern.
- JPMorgan’s results included a boost from an accounting gain related to an exchange of shares in credit card giant Visa.
- Wells Fargo, meanwhile, said it now expects full-year net interest income to be down 8% to 9%, slightly worse than its prior guidance for a drop of 7% to 9%.
The real estate sector had the largest percentage gain this week, up 4.4%, followed by a 3.9% increase in utilities. Other sectors up by at least 2% each included materials, health care, industrials and financials.
Just one sector, communication services, fell on the week with a 3.6% drop.
This week, the earnings season will ramp up with reports from companies including Goldman Sachs Group, UnitedHealth Group, Bank of America, Morgan Stanley, Charles Schwab, Johnson & Johnson, Netflix, and more.
Economic data will include June retail sales, import prices, housing starts, building permits and industrial production.
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