Profit-taking continued in US Equity Markets last week, though better-than-expected inflation data curbed the selling pressure. The S&P 500 fell 0.3% for the week and is now up 16.3% for the year. The Nasdaq was down 1.9% for the week to bring its gains for the year to 30.4%, while the Russell 2000 (small cap stocks) declined 1.7% for the week and is now up 9.3% for the year.
Weak economic data out of China raised hopes for a long-rumored Chinese economic stimulus package, helping prop up Global Equity Markets last week. Developed Markets increased 0.5% for the week and are now up 9.1% for the year. Emerging Markets were down 1.0% for the week on weakness in Chinese markets to bring its gains for the year to 4.7%.
US Inflation data for July were generally better than forecasts. The Consumer Price Index (CPI) for July showed a 3.2% increase in prices from a year-ago, up from 3.0% in June but slightly better than projections. Core CPI, which excludes food and energy prices, rose 4.7% in July from a year ago, down from 4.8% in June. However, Producer Prices for July rose a bit worse than expected, which will be monitored to see if those flow into consumer prices.
Of Interest to Us
Corporate earnings for Q2 have fallen less than expected. With 84% of companies having reported their results, the earnings decline for the S&P 500 for Q2 is 5.2%, better than the 5.7% decline expected heading into earnings season. Of those firms reporting, 79% have beaten earnings expectations whlie 65% have beaten revenue forecasts, both above their respective 10-year averages.
for the week ending 8/11/2023
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