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US market weekly: S&P 500 ends higher amid strong macroeconomic signals and upbeat quarterly earnings

US market weekly: S&P 500 ends higher amid strong macroeconomic signals and upbeat quarterly earnings

Last updated: 23 Oct, 2021 | 11:02 am

US market weekly: S&P 500 ends higher amid strong macroeconomic signals and upbeat quarterly earnings

US indices started off the week on a higher note on Monday as investors were optimistic about the third quarter earning season. However, US industrial production fell to its lowest since Feb as supply constraints continued to hinder manufacturing.

US Stocks advance on Tuesday due to growing optimism that US lawmakers are nearing a new fiscal stimulus deal. New earnings results topped Wall Street's expectations, suggesting more companies were able to work through ongoing supply chain challenges and still generate solid profits. 

US indices ended near an all-time high on Wednesday due to the Fed’s latest Beige Book report that points to a modest growth pace of the US economy, and upbeat third-quarter earnings report. However, the Nasdaq ended in the red, weighed down by 10-year Treasury yield climbing above 1.6% and pressurizing yield-sensitive stocks.

The US stocks ended higher on Thursday, led by outperformance in the consumer and information technology sectors. A better-than-expected report on new weekly jobless claims also boosted investors sentiments, with claims hitting new pandemic-era low.

US indices reported mixed results on Friday as investors digested new commentary on asset-purchase tapering and inflation from Federal Reserve Chair Jerome Powell, amid fresh earnings reports from major companies. For the week, S&P 500 ended 1.6% higher and Dow Jones 1.1% higher. 

Weekly market stats with IND

Let’s see the major developments during the week:

Earnings beats feed gains: The US indices moved to record highs, as a series of positive earnings beats expectations. Along with real estate and utilities stocks, health care shares led the gains within the S&P 500, boosted by insurance providers. Communication services shares were strong through much of the week, but social media stocks dropped sharply on Friday. Energy shares also underperformed following strong recent gains.

Macroeconomics signals: The week’s economic data were mixed. Hopes for additional fiscal stimulus appeared to boost sentiments. In the housing sector, where both housing starts and building permits came in well below expectations, existing home sales jumped unexpectedly to their highest level since January. Industrial production fell 1.3% in September due to disruptions from Hurricane Ida and ongoing supply chain issues in the auto industry. Weekly jobless claims fell more than consensus expectations and reached new pandemic-era lows.

Bond yields hit five-month highs: U.S. Treasury yields increased with the 10-year U.S. Treasury note yield trading around 1.69% up from 1.59% the previous week and a five-month high. (Bond prices and yields move in opposite directions.) With monetary policy remaining in focus, five-year notes experienced the most meaningful yield increases.

Delta variant remains a concern: The spread of the delta variant appears to have gradually slowed down as economic progress is coming back on track.  An average of roughly 73,896 coronavirus cases have been reported each day in the United States while the total cases have crossed the 45.4 million mark. However, to battle this, the pace of vaccination has also picked up. About 57.7% of the eligible American population (age 12 and over) are fully vaccinated and over 66.7% have received the first dose.

Oil prices at 3 year high: Global oil prices continued their climb to their highest level in over three years and further pushed higher. The U.S. oil benchmark remained at $84 per barrel as demand rebounds while supply remains tight. The World Bank on Thursday said that the stunning recent runup in global oil prices could threaten economic growth, and is unlikely to retreat until 2023.