Investment Commentary – July 29th, 2015
Dow 17,751 (-0.40% YTD)
S&P 500 2,108 (2.41% YTD)
NASDAQ 5,111 (7.93% YTD)
10-year Treasury 2.29 (52 week low 1.64/high 2.66)
Gold $1,096 (52 week low $1,074/high $1,325)
Oil $48.88 (52 week low $46.68/high $93.65)
- U.S. stocks finished stronger on Wednesday after the U.S. Federal Reserve said the economy and job market continued to strengthen and left its key interest rate unchanged. The central bank’s comments on the economy and inflation after its two-day pow-wow appeared to do little to drastically change wide expectations that the first rate hike will come in September or possibly December.
- The Dow Jones industrial average .DJI rose 0.69 percent to end at 17,751.39. The S&P 500 .SPX gained 0.73 percent to 2,108.57 and the Nasdaq Composite .IXIC added 0.44 percent to finish at 5,111.73.
- The S&P 500 has bounced about 2 percent higher in the past two days following a deeper near-3 percent drop over the preceding week that had been caused in part by a rout in China’s stock markets.
- China’s economy is “resilient” and should be able to withstand sharp moves in the country’s stock market, said Christine Lagarde, the managing director of the International Monetary Fund, on Wednesday. “We are still forecasting China [growth] at 6.8%” for 2015, Lagarde said during a press conference. “It certainly is a bit lower than what it delivered lately, but it is a measured slowdown, I think very much under control.”
- Equities sold off globally last week, but Europe is at least having a good earnings season, while Japanese equities continue to benefit from institutional buying. In Europe, with Greece fading as a concern at least temporarily, investors are renewing their focus on earnings. Thus far, roughly 55% of European companies have beat estimates, with average year-over-year earnings-per-share growth of 15%. Banks and consumer discretionary companies have done particularly well, with 75% exceeding expectations.
- On this day 106 years ago: July 29, 1909, the newly formed General Motors Corporation (GM) acquires the country’s leading luxury automaker, the Cadillac Automobile Company, for $4.5 million. Cadillac was founded out of the ruins of automotive pioneer Henry Ford’s second failed company (his third effort, the Ford Motor Company, finally succeeded).
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.