Weekly Economic Update presented by Meld University

Weekly Riddle:

There are four days which start with the letter "T" Two of them are Tuesday and Thursday… Name the other two.

Tune in next week for the answer.
(Last week's riddle and answer can be found near the end of this post.)

Our latest event has concluded, but you can still watch the replay:

Financial Fingerprint: How to Approach Your Retirement Questions presented by William D. Connor, Financial Advisor at Meld Financial.
 

Join us for our next live Meld University Event:

DEFENSE WINS RETIREMENT™: How to Shift Your Strategy From Growth to Income presented by Kyle Whittington, CFP®, President at Meld Financial. The webinar will be held on August 24th at 3:00 PM Central Time. There is no cost to attend, but you must register in advance.

 

Weekly Economic Update

Last Week and the Economy

After reports of rising COVID-19 cases and a tough start to the week, U.S. stock markets reacted positively to a new wave of earnings reports. Housing data was released that indicated a slowdown in home construction and an increase in the supply of existing homes for sale.

Last week, the Dow Jones Industrial Average [DOW] gained 1.08%, while the S&P 500 and Nasdaq Composite indices grew by 1.96% and 2.84%, respectively. The Russell 2k Small Cap Index also increased by 2.15%, and the MSCI-EAFE Index, which tracks developed overseas stock markets, gained a modest 0.19%.

Housing Market: Signs of Slowing

During the pandemic, the U.S. saw a dramatic shift as populations moved from cities into the suburbs. This behavior shift, coupled with low supply of housing and increasing prices of materials, drove home prices to unprecedented levels. However, data released on Tuesday showed signs that the housing market may be slowing down, as building permits for new homes fell by 5.1% from May to June. On the bright side, new home permits still exceeded June 2020 numbers by 23.3%.

Thursday, the National Association of Realtors [NAR], reported that total housing inventory in June increased by 3.3% from May but was still 18.8% lower than June 2020. The Case-Shiller’s 20-city composite home price index shows an annual increase in home prices of 14.9%. While home prices reported by the index are still higher than pre-pandemic levels, they have cooled off by more than 15% since November’s height.

COVID-19 Cases Rise, Stocks Falter

Monday, stock prices fell as the number of new COVID-19 cases increased due to the highly transmittable delta variant. The 7-day moving average for new cases was over 30,000 on Monday and continued to increase throughout the week ending at over 47,000 by Friday. This is a significant increase from the month prior which saw a 7-day moving average of around 11,000 cases.

As this news was circulating, the DOW fell more than 800 points by midday Monday. Companies that would be most affected by a resurgence of the virus experienced the largest impacts. United Airlines, American Airlines, and Delta Airlines all saw their stock prices drop by more than 4% during the trading day. By Tuesday, U.S. stock indices recovered most of the losses and began trading on an upward trajectory which lasted the remainder of the week.

Earning Season Brings Positive Results

Positive reports during corporate earnings season drove stock prices higher last week. Among the gainers, American Express Co. (AXP) increased 1.3% after reporting a higher than expected second-quarter profit – a positive sign for the overall economy. Tech companies Twitter and Snap saw their stock prices jump 3.0% and 23.8% respectively after positive earnings reports.

On Friday, the DOW broke 35,000 for the first time, and all three major indices closed at record highs. During this earnings season, 120 of the companies in the S&P 500 have reported earnings so far. Of those, 88% have shown earnings that outpaced estimates.

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Key Economic Data Points

Unemployment Rate:

FOMC Target Rate:

GDP:

As of May 2021: 5.9% (Next Report: 8/6/21)

As of June 16, 2021: 0 – 0.25% (Next Report: 7/28/21)

Q1 2021: +6.4% (Next Report: 7/29/21)

Data Sources: U.S. Bureau of Labor Statistics, FRED – St. Louis Fed, U.S. Bureau of Economic Analysis.

Weekly Quote:

He who loses money, loses much; He who loses a friend, loses much more; He who loses faith, loses all.
-Eleanor Roosevelt

The Week Ahead – Economic Data & Events

Monday: New Home Sales

Tuesday: Durable Goods Orders, Consumer Confidence

Wednesday: International Trade in Goods, FOMC Announcement, Fed Chair Press Conference

Thursday: GDP, Pending Home Sales Index, Fed Balance Sheet

Friday: Employment Cost Index, Personal Income and Outlays, Chicago PMI, Consumer Sentiment

Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status (Wednesday), Jobless Claims (Thursday), EIA Nat Gas (Thursday), Baker Hughes Rig Count (Friday).

Source: Econoday

The Week Ahead – S&P 500 Companies Reporting Earnings

Monday: Ameriprise Financial, Inc. (AMP), Alexandria Real Estate Equities, Inc. (ARE), Cadence Design Systems, Inc. (CDNS), F5 Networks Inc. (FFIV), Hasbro, Inc. (HAS), Lockheed Martin Corp. (LMT), Otis Worldwide Corp. (OTIS), Packaging Corporation of America (PKG), Tesla, Inc. (TSLA), Universal Health Services Inc. (UHS)

Tuesday: Apple Inc. (AAPL), Archer-Daniels-Midland Company (ADM), Advanced Micro Devices Inc. (AMD), Boston Scientific Corporation (BSX), Boston Properties Inc. (BXP), Chubb Limited (CB), C.H. Robinson Worldwide Inc. (CHRW), Centene Corporation (CNC), DTE Energy Company (DTE), Ecolab Inc. (ECL), Enphase Energy Inc. (ENPH), Equity Residential (EQR), Extra Space Storage Inc. (EXR), Fiserv Inc. (FISV), General Electric Company (GE), Corning Inc. (GLW), Alphabet Inc. (GOOG), IDEX Corporation (IEX), IQVIA Holdings Ince. (IQV), Invesco Ltd. (IVZ), Juniper Networks Inc. (JNPR), Lamb Weston Holdings Inc. (LW), Mondelez International Inc. (MDLZ), 3M Company (MMM), Monolithic Power Systems Inc. (MPWR), MSCI Inc. (MSCI), Microsoft Corporation (MSFT), Maxim Integrated Products Inc. (MXIM), NortonLifeLock Inc. (NLOK), NOV Inc. (NOV), PACCAR Inc. (PCAR), Principal Financial Group Inc. (PFG), PulteGroup Inc. (PHM), Pentair PLC (PNR),Rockwell Automation Inc. (ROK), Raytheon Technologies Corporation (RTX), Starbucks Corporation (SBUX), Sherwin-Williams Company (SHW), Stanley Black & Decker Inc. (SWK), Stryker Corporation (SYK), Teradyne Inc. (TER), United Parcel Service Inc. (UPS), Visa, Inc. (V), Waste Management Inc. (WM)

Wednesday: Automatic Data Processing Inc. (ADP), Aflac Inc. (AFL), Align Technology Inc. (ALGN), Amphenol Corp. (APH), AvalonBay Communities Inc. (AVB), Avery Dennison Corporation (AVY), Boeing Company (BA), Bristol-Myers Squibb Company (BMY), Cincinnati Financial Corporation, (CINF), CME Group Inc. (CME), Cognizant Technology Solutions Corporation (CTSH), Duke Realty Corporation (DRE), Equinix Inc. (EQIX), Ford Motor Company (F), Facebook Inc. (FB), Fortune Brands Home & Security Inc. (FBHS), General Dynamics Corporation (GD), Generac Holdings Inc. (GNRC), Garmin Ltd. (GRMN), Hess Corporation (HES),  Hartford Financial Services Group Inc. (HIG), Hologic Inc. (HOLX), Humana Inc. (HUM), Ingersoll Rand Inc. (IR), Lam Research Corporation (LRCX), Mid-America Apartment Communities (MAA), McDonald’s Corporation (MCD), Moody’s Corporation (MCO), ServiceNow Inc. (NOW), Norfolk Southern Corporation (NSC), NVR Inc. (NVR), Old Dominion Freight Line Inc. (ODFL), O’Reilly Automotive Inc. (ORLY), Pfizer Inc. (PFE),  PerkinElmer Inc. (PKI), PTC Inc. (PTC), PayPal Holdings Inc. (PYPL), QUALCOMM Inc. (QCOM), Everest Re Group Ltd. (RE), Raymond James Financial Inc. (RJF), Rollins Inc. (ROL), Teledyne Technologies Inc. (TDY), TE Connectivity Ltd. (TEL), Thermo Fisher Scientific Inc. (TMO), Tyler Technologies Ins. (TYL), UDR Inc. (UDR), United Rentals Inc. (URI), Xilinx Inc. (XLNX)

Thursday: Arthur J. Gallagher & Co. (AJG), Alexion Pharmaceuticals Inc. (ALXN), American Tower Corporation (AMT), Amazon.com Inc. (AMZN), A. O. Smith Corporation (AOS), Baxter International Inc. (BAX), Bio-Rad Laboratories Inc. (BIO), Carrier Global Corp. (CARR), CBRE Group Inc. (CBRE), Comcast Corporation (CMCSA), CMS Energy Corporation (CMS), Citrix Systems Inc. (CTXS), Digital Realty Trust Inc. (DLR), DexCom Inc. (DXCM), Edison International (EIX), Essex Property Trust Inc. (ESS), Edwards Lifesciences Corporation (EW), Expedia Group Inc. (EXPE), Fortinet Inc. (FTNT), Fortive Corp. (FTV), Gilead Sciences Inc. (GILD), Huntington Bancshares Inc. (HBAN), Hilton Worldwide Holdings Inc. (HLT), Hershey Company (HSY), Intercontinental Exchange Inc. (ICE), International Paper Company (IP), Kimco Realty Corporation (KIM), KLA Corporation (KLAC), Laboratory Corporation of America Holdings (LH), LKQ Corporation (LKQ), Mastercard Inc. (MA), Masco Corporation (MAS), Mohawk Industries Inc. (MHK), Martin Marietta Materials Inc. (MLM), Altria Group Inc. (MO), Merck & Company (MRK), Mettler-Toledo International Inc. (MTD), Nielsen Holdings Plc (NLSN), Northrop Grumman Corp. (NOC), Republic Services Inc. (RSG), Southern Company (SO), S&P Global Inc. (SPGI), Skyworks Solutions Inc. (SWKS), Molson Coors Beverage Company (TAP), Teleflex Inc. (TFX), T-Mobile (TMUS), Textron Inc. (TXT), Valero Energy Corporation (VLO), Vertex Pharmaceuticals Inc. (VRTX), Westinghouse Air Brake Technologies Corp. (WAB), Welltower Inc. (WELL), West Pharmaceutical Services Inc. (WST), Xcel Energy Inc. (XEL), Yum! Brands Inc. (YUM)

Friday: AbbVie Inc. (ABBV), Aon Plc. (AON), Caterpillar Inc. (CAT), Cboe Global Markets Inc. (CBOE), Cerner Corporation (CERN), Church & Dwight Co. Inc. (CHD), Charter Communications Inc. (CHTR), Colgate-Palmolive Company (CL), Cabot Oil & Gas Corporation (COG), Chevron (CVX), Eversource Energy (ES), W.W. Grainger Inc. (GWW), IDEXX Laboratories Inc. (IDXX), Illinois Tool Works Inc. (ITW), Johnson Controls International Plc (JCI), Linde Plc (LIN), LyondellBasell Industries NV (LYB), Newell Brands Inc. (NWL), Proctor & Gamble Company (PG), V.F. Corp. (VFC), Weyerhaeuser Company (WY), Exxon Mobile Corp. (XOM)

Source: Finscreener

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Weekly Tip:

Social Security covers about 40% of retirement on average. You can make up the difference in several ways. For example, you can start putting more in your retirement accounts, save in an HSA, or delay your Social Security filing to increase your monthly payments. To ensure you are on the right track for your retirement goals, speak with the experienced team of financial professionals here at Meld Financial.

Major index levels for last week.
S&P 500 levels last week.

Data Sources for stock and index quotes: Yahoo Finance, WSJ

Our latest event has concluded, but you can still watch the replay:

Financial Fingerprint: How to Approach Your Retirement Questions presented by William D. Connor, Financial Advisor at Meld Financial.
 

Join us for our next live Meld University Event:

DEFENSE WINS RETIREMENT™: How to Shift Your Strategy From Growth to Income presented by Kyle Whittington, CFP®, President at Meld Financial. The webinar will be held on August 24th at 3:00 PM Central Time. There is no cost to attend, but you must register in advance.

 

Last Week's Riddle and Answer

Last Week's Riddle:
What gets bigger the more you take away?

Last Week's Answer:
A hole.

Securities Offered Through Triad Advisors, LLC. Member FINRA/SIPC Advisory Services Offered Through Meld Financial Inc. Meld Financial, Inc. and Triad Advisors, LLC. Are Not Related. The information contained herein should not be construed as legal advice or a legal opinion on any factual situation. Its contents are intended for general information purposes only. Always consult with a competent professional service provider for advice on tax, accounting, and other financial matters specific to your situation.

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The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

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