Secondly, Bank of America's bull market signposts indicate it's premature to call a bottom. "We are still in the very early innings of downturn and estimate cuts."ĭuring the prior five recessions except in 1990, the S&P 500 bottomed after estimates were revised down, but today, estimate cuts are just starting and forward earnings per share is still up 7% since the market peak, the strategist said. "Was June low the big low? We need more EPS cuts," Subramanian said in a note. The strategist said the stock market typically bottoms after earnings estimates get slashed dramatically, but that hasn't happened yet. equity and quantitative strategy Savita Subramanian. It's too soon to call the bottom even as the S&P 500 just enjoyed its best month since November 2020, according to BofA Securities head of U.S. Many customers appear to be pulling back on orders in an effort to reduce inventories," said one respondent in the food, beverage and tobacco products industry. "Growing inflation is pushing a stronger narrative around pending recession concerns. New orders dropped to 48 while inventories edged higher to 57.3.Ĭomments from participants indicate that inflation and supply chain bottlenecks remain a concern. In another encouraging development, the employment index rose to 49.9, still barely in contraction territory but 2.6 points higher than June. The monthly decline in the index was the biggest fall since June 2010. Though the number indicates that price increases are still strong, the relative decline is significant for an economy with an inflation rate running at its fastest pace since the early 1980s. Importantly, one big reason for the low reading was a massive slide in the prices index, which tumbled 18.5 points to 60. The number fell slightly from June's 53 reading, but was a bit above the Dow Jones estimate for 52.1. The index registered a 52.8 reading for the month, representing the percentage of businesses seeing growth for the month. Manufacturing expanded in July for the 26th straight month, but at the slowest pace since June 2020, according to the latest Institute for Supply Management reading. Lea la cobertura del mercado de hoy en español aquí. Earnings are due from Caterpillar, PayPal and Starbucks. is currently not in a recession, despite two consecutive quarters of negative GDP. Solid jobs growth has led economists to say the U.S. The July nonfarm payrolls report from the Bureau of Labor Statistics will give more insight into the labor market. This week, investors have more economic data and company earnings to digest. "Markets may test the substantial rally that occurred last week as they consider the progress the Federal Reserve has made thus far to stem the course of inflation," John Stoltzfus, Oppenheimer's chief investment strategist, wrote in a note. For each index, July's performances were the best since 2020. The Nasdaq Composite rose 12.4% as investors rushed into the tech stocks beaten up the most during this bear market. The Dow gained 6.7% in July, while the S&P 500 added 9.1%. On Friday, all major indexes gained, posting winning weeks and capping off the best month of the year so far and then some. The report also showed that prices slipped, a positive development amid high inflation. Shares of chipmakers like AMD and Nvidia rebounded into positive territory and remained there. Shares of Diamondback Energy, ExxonMobil, Chevron and Devon Energy all traded down.Ī better-than-expected manufacturing report helped sentiment. The energy sector was a big drag on the market as oil prices fell. approved a plan to resume 787 deliveries. The 30-stock Dow slipped even though Boeing jumped 6.13% after the U.S. The Dow Jones Industrial Average shed 46.73 points, or 0.14%, to end at 32,798.40. The Nasdaq Composite lost 0.18% and closed at 12,368.98. Stocks fell on Monday as trading opened in August, with some investors questioning whether the recent rally has further to run following the best month since 2020.Īll three major indexes snapped three-day winning streaks, with the S&P 500 slipping 0.28% to end at 4,118.63.
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