Market Performance For The Prior Week
Disclaimer: Past performance is no guarantee of future performance
The Good News
2Q earnings keep pouring in above estimates
For more info and charts about Q2 earnings, please visit past posts.
The Mixed News
What companies are saying
In the past week, a number of companies have addressed questions regarding the spike since the beginning of the third quarter.
- Southwest Airlines warned of a sharp deterioration in business in recent weeks, a challenge that is affecting all airlines.
- Airbnb, however, said, “in the last few weeks, we had our biggest night ever in the U.S. and our biggest night globally since the pandemic began.”
- Aramark, which provides on-site food services, says the disruption is “really limited mostly to companies and their return-to-work strategies.” Though executives don’t think it’ll impact colleges, sporting arenas and entertainment venues.
- Foodservice competitor Sysco shared that sentiment, noting it did not experience any impact in July tied to Delta. However, CEO Kevin Hourican cautioned that they couldn’t predict whether the government might step in with new restrictions.
- Casper Sleep president Emilie Arel said Tuesday that people were still out shopping, saying, “To date, we are seeing week-over-week improvements on foot traffic.”
- Bumble has experienced no slowdown in activity on its dating app. “When COVID accelerates and loneliness climbs, people turn to us for connections,” Bumble CEO Whitney Wolfe Herd said on Wednesday.”
Source: Sam Ro (Axios)
The Bad News
Covid refuses to go away
US Covid-19 Update (*7-day Avg):
-New Cases*: 121k (highest since Feb 5)
-% Positive*: 10.8% (highest since Jan 17)
-Hospitalizations: 78k (highest since Feb 9)
-Deaths*: 537 (highest since May 22) pic.twitter.com/Mp9hAXsiP9
— Charlie Bilello (@charliebilello) August 16, 2021
And many continue to worry about the Delta variant
— Barry Ritholtz (@ritholtz) August 13, 2021
Which is partly to blame for the weak retail sales numbers this week
July retail sales much weaker at -1.1% vs. -0.3% est. & +0.7% in prior month (rev up from +0.6%); sales took hit from autos, but ex-autos weak at -0.4% vs. +0.2% est. & +1.6% in prior month (rev up from +1.3%)…control group -1% vs. -0.2% est. & +1.4% prior (rev up from +1.1%) pic.twitter.com/peBOvQMkDU
— Liz Ann Sonders (@LizAnnSonders) August 17, 2021
JPMORGAN: “Retail spending outcomes have fallen short of our .. model in recent months. Our US card data reinforces this note of caution, showing a loss of momentum for airline spending and leveling off for restaurant spending this quarter.” $XAL pic.twitter.com/Tgt1VU0pLF
— Carl Quintanilla (@carlquintanilla) August 10, 2021
It’s not just demand, though. Supply chains continue to be a problem.
Shipping bottlenecks and resulting supply-chain disruptions are "the single biggest threat the economy faces at the moment…Imagine if oil went up from $20 per barrel to $200 per barrel, then that would be tantamount to what’s happening now." https://t.co/ixdKx9Jor0 pic.twitter.com/8O46VV55LN
— Lisa Abramowicz (@lisaabramowicz1) August 16, 2021
“Thirty-seven ships were anchored awaiting berth space outside the twin ports of Los Angeles and Long Beach, California, as of late Sunday, the most since early February.”
— Danielle DiMartino Booth (@DiMartinoBooth) August 17, 2021
— Christophe Barraud🛢 (@C_Barraud) August 15, 2021
Resulting in consumers and manufacturers feeling less optimistic
“On we go to US housing starts and retail sales, after the softness of U-Mich and Empire State. Retail sales are volatile, but they are a real measure of spending, and so more important than activity surveys.” @kitjuckes pic.twitter.com/QciBoE8zkb
— Sam Ro 📈 (@SamRo) August 17, 2021
The State Of The Market
Yet investor sentiment remains high
4. Investor Confidence vs Consumer Confidence
— Callum Thomas (@Callum_Thomas) August 14, 2021
Probably because corporations have been able to pass along price increases effectively
— Sam Ro 📈 (@SamRo) August 14, 2021
And liquidity remains elevated
As is always the case, when looking at any ratio involving disposable personal incomes (#DPI) the measures are skewed by the top 10%.
Good example from @soberlook is liquid assets to DPI as shown below. pic.twitter.com/7GPmdPVG0T
— Lance Roberts (@LanceRoberts) August 10, 2021
— Barry Ritholtz (@ritholtz) August 16, 2021
Ultimately cultivating in this impressive run
Market milestone: The S&P 500 just doubled its level from its pandemic low close, marking the fastest bull-market doubling off a bottom since World War II 📈
— Nate Rattner (@naterattner) August 16, 2021
Quite stunning … as of end of last week, S&P 500 has gone 200 days with > 75% of its members trading above their 200d moving average … takes out prior record set in 2013 and is best stretch since 2004
[Past performance is no guarantee of future results] pic.twitter.com/4d0UakhlQE
— Liz Ann Sonders (@LizAnnSonders) August 17, 2021
The average intra-year drawdown of the S&P 500 Index is 14%. This year we had two drawdowns of 4%. If it stays like this in 2021, only two calendar years since 1980, 1995 and 2017, would have seen smaller intra-year drawdowns. pic.twitter.com/YeCGCPAwSA
— jeroen blokland (@jsblokland) August 16, 2021
And, fortunately, many are taking advantage. But also a little worrisome.
In the first 6 months of the year, US equities experienced $267 billion of inflows. To put that in context, that’s $72 billion more than was achieved in the whole of 2013, the previous record year.
via @ManGroup pic.twitter.com/MLKxM342Bw
— Andrew Thrasher, CMT (@AndrewThrasher) August 16, 2021
Charts Of The Week
"High frequency data suggests a hot rental market…" BofA pic.twitter.com/rbPAjtFL8R
— Sam Ro 📈 (@SamRo) August 15, 2021
GOLDMAN: “Companies have authorized $683 bn in buybacks through July, the largest total on record at this point in the year outside of 2018, in the wake of tax cuts. We therefore see some upside risk to our baseline S&P 500 buyback forecast of $726 bn this year.” [Kostin] pic.twitter.com/S6xG7fSUWI
— Carl Quintanilla (@carlquintanilla) August 15, 2021
— Visual Capitalist (@VisualCap) August 14, 2021
Global 🌎 Covid deaths pic.twitter.com/6NkZIaeNsA
— Win Smart, CFA (@WinfieldSmart) August 10, 2021
Technology margins are 2x the broader S&P 500 – GS pic.twitter.com/azvqTsxvUe
— Sam Ro 📈 (@SamRo) August 12, 2021
— Visual Capitalist (@VisualCap) August 12, 2021
Stories Of The Week
Internet pet rocks are selling for $100,000: https://decrypt.co/78097/ethereum-pet-rock-nfts-selling-more-than-100000
32% of people admit to trading while drunk: https://www.magnifymoney.com/blog/news/emotional-investing-survey/
Crypto hackers stole $600 million, then generously gave some back: https://www.wsj.com/articles/poly-network-hackers-steal-more-than-600-million-in-cryptocurrency-11628691400
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