Stocks were mixed over the last week of July on corporate earnings and weaker economic reports. The S&P 500 was flat, while the Dow fell 0.7% for the week. Abroad Japan was off 0.4% and Europe rose 0.5% for the week. The yield on the 10 year Treasury finished the month at 1.46% after starting July at 1.49%. Oil has sunk from the $50 a barrel level seen in June to finish July at $41.60.The Fed stated at the end of their July meeting that “near term risks to the economic outlook have diminished” potentially opening the door to an interest rate increase this year, possibly as soon as September.
The Bank of Japan announced it would buy $58 billion worth of stock ETS, more than it previously had, left its target for purchasing government assets the same and didn’t cut its main interest rate further into negative territory. The modest stimulus measures were a slight disappointment to investors.
The eurozone’s GDP fell to 1.2% in the second quarter down from 2.2% in the first quarter as exports remain weak and unemployment remains elevated at 10.1%.
US GDP rose just 1.2% in the second quarter as falling business investment weighs. The growth pace was well below expectations and 2016 has had the weakest growth over the first half since 2011.
With more than half of the firms in the S&P 500 reporting earnings, they are on pace to decline 3.8% from a year earlier. This would top estimates of a 5.3% decline.
Reposted from the Raffa Wealth Management Blog.
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