US weekly: S&P 500 soars to new high as robust jobs report, earnings boost sentiments

US weekly: S&P 500 soars to new high as robust jobs report, earnings boost sentiments

Last updated: 07 Aug, 2021 | 09:24 am

US weekly: S&P 500 soars to new high as robust jobs report, earnings boost sentiments

US markets started off on a weak note on Monday, as concerns around the delta variant’s spread and peaking of economic growth weighed. Stocks that would benefit from reopening such as Airlines, Tourism, Entertainment and Industrial Metals were the worst hit on the day. 

S&P 500 rose to a fresh record high on Tuesday, as robust earnings outweighed concerns of peaking growth. On Wednesday, the US stocks posted a correction as Fed Vice Chairman Richard Clarida noted that the rapid spread of Covid-19 poses a downside risk to the central bank’s growth estimates.

On Thursday, the index regained its footing and posted a fresh record high, as energy and travel-related stocks bounced back ahead of a key labour market report. The jobs report is a key data point for the Fed Reserve for deciding when to start to tighten its easy monetary policy.

The Labor Department’s closely tracked monthly payrolls report provided a boost to sentiments of Friday, with the index notching up another record. Employers in the US added 943,000 jobs in June, well above consensus estimates and the best showing in the pandemic-era. For the week, S&P 500 gained 0.9%, while the Dow Jones gained by 0.8%. Tech-heavy Nasdaq rose by 1.1%.  

Weekly US market stats with IND

Let’s see the major developments during the week

Strong earnings boost sentiment: After the market fall on Monday, some positive earnings surprises helped the market regain its footing over the next few days. Analysts polled by FactSet are currently expecting second-quarter earnings for the S&P 500 to have increased by over 85% on an yearly basis. Notably, over 50% of the S&P 500 companies have reported better-than-estimated earnings.  

Bond yields rise after hawkish comments from Fed: Fed Vice Chairman Richard Clarida said that the central bank is on track for lifting interest rates in 2023, putting an end to its pandemic-driven easy monetary policy. Further, the Fed said that there will be an announcement on paring bond repurchases later this year. Following the announcement, Intermediate- and long-term Treasury yields jumped, as bond market investors sold off their bonds. For the week, bond yields rose by 0.1%. 

Oil prices plunge: Oil prices plunged 8% in the week, as weak economic data from China and the spread of delta variants posed concerns around demand. China's factory activity growth slipped sharply in July as demand contracted for the first time in more than a year. Further, and higher crude output from OPEC producers stoked fears of weakness in oil demand and oversupply of the commodity.

Check out our other analysis on important market developments!

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