Stocks Surge Amid Inflation Data and Earnings Kickoff:
Stocks advanced last week as market leadership shifted in response to fresh inflation data and the beginning of quarterly corporate earnings reports.
The S&P 500 Index advanced 0.87%, while the Dow Jones Industrial Average picked up 1.59%. The tech-heavy Nasdaq Composite Index, which has led all year, rose 0.25%. The MSCI EAFE Index, which tracks developed overseas stock markets, rallied 1.62% for the week through Thursday’s close.1
Source: Charles Schwab & Co., Inc
Dow Breaks 40,000 (Again)
Mega-cap tech led modest gains for the S&P 500 and Nasdaq in the first two days of the week, with the Dow posting modest losses both days.
But that narrow trading range didn’t last long as market leadership shifted midweek. Upbeat corporate earnings reports and milder-than-expected consumer inflation in June drove momentum in a handful of larger industrial and consumer stocks.2,3
Q2 earnings season got into full swing later in the week, dominated mostly by financial and consumer-oriented companies. Markets seemed initially unfazed by better-than-expected reports from some money center banks. Some observers suggested higher interest rates may be one of the reasons for the market’s lukewarm response.4
The Dow ended the week with a solid gain after three consecutive weeks of trailing the S&P 500 and Nasdaq. The Dow also closed above 40,000, the first time it had done so since May, and hit a 52-week intraday high on Friday.
![](https://concordassetmgmt.com/wp-content/uploads/2024/07/CAM_MMU_7.15.24_Graph-2-e1721052753931.png)
Source: Charles Schwab & Co., Inc
Mixed Inflation News
Two inflation reports came out last week: PPI and CPI. The Producer Price Index, which measures the change in wholesale prices, rose 2.6% in June year over year—its largest increase in 16 months. By contrast, the Consumer Price Index, which tracks consumer prices, showed that the pace of inflation slowed in June.
Markets shrugged off the conflicting data, instead embracing the cooler CPI data. The Fed is likely taking notes for its next Fed meeting, scheduled for July 30-31.5
This Week: Key Economic Data
![](https://concordassetmgmt.com/wp-content/uploads/2024/07/CAM_MMU_7.15.24_Graph-3-e1721052798571.png)
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
![](https://concordassetmgmt.com/wp-content/uploads/2024/07/CAM_MMU_7.15.24_Graph-4.jpg)
Source: EarningsWhispers
A Special Message from Our Chief Investment Officer
We are horrified by the attempted assassination of Donald Trump this weekend, but are relieved that Mr. Trump seems to have made a full recovery. As our clients know, we closely monitor politics in the United States and around the world as part of our research process. Our investment philosophy involves taking a longer view based upon sound economic reasoning that considers factors such as risk, reward, and relative value. We do not trade around specific events.
We encourage you to register here to tune into our Halftime Report tomorrow evening where CEO Wade Lopez and I will discuss the past six months, the election and its implications for investors, as well as what we expect from markets in the coming months.
Author
![](https://concordassetmgmt.com/wp-content/uploads/2024/01/Gary-Aiken-Headshot-Website.png)
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1The Wall Street Journal, July 12, 2024
2The Wall Street Journal, July 12, 2024
3The Wall Street Journal, July 11, 2024
4The Wall Street Journal, July 12, 2024
5The Wall Street Journal, July 12, 2024
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