Anticipated Fed Rate Hike, Earnings and the 10th Straight Win for Dow Jones
July 23, 2023
On Friday, stocks remained relatively stable, with investors turning their focus towards earnings expected in the coming week. These predictions come alongside what is believed to be the last hike in interest rates by the Federal Reserve for the current cycle. In a narrow win, the Dow Jones average scored its 10th consecutive victory, the longest such streak seen in approximately six years. This indicates that the market rally is expanding beyond a small number of chip manufacturers and successful tech firms, branching into various sectors of the economy such as healthcare, banking, and energy.
Friday’s Quarterly Reports
Friday’s financial roundup saw quarterly results from diverse businesses. The list of reporters included American Express (AXP), a credit card firm and component of Dow 30, SLB (SLB), an oilfield services corporation, and Interpublic (IPG), a prominent advertising powerhouse. Of these, Interpublic ended up being the “S&P 500’s greatest percentage loser.”
Stabilizing Treasury Yields
The Treasury yields recovered, steadying after a surge in Thursday’s session. This was partly driven by economic data showing a continued decrease in initial unemployment claims. The longer-term 10-year yield experienced a decline of 1 basis point, settling at 3.84%. On the other hand, the more rate-sensitive 2-year yield increased by 1 basis point, finishing at 4.85%.
Performance Summary of the Week
Reflecting on the performance of the just-concluded week, the Dow saw a leap of 2.1%. Similarly, the S&P 500 registered a growth of 0.7%. In contrast, the Nasdaq Composite recorded a slip of 0.6%.
In anticipation of next week’s crucial market events, investors are encouraged to read Seeking Alpha’s Catalyst Watch. It includes an overview of major events like central bank meetings and a rush of earnings reports expected to flood the market.