Week of July 19, 2021
The U.S. equity markets dropped last week over concerns about the continued rise in COVID-19 cases worldwide and the potential for a slowed economic recovery. On the week, the Dow declined 0.5%, snapping a 3-week winning streak. The S&P 500 and the NASDAQ also declined, losing 1% and 1.9%, respectively.
“Markets seem to be grappling with the fear that the virus isn’t going away despite worldwide vaccinations in the major economies,” sad Marios Hadjikyeriacos, senior investment analyst at XM.
Inflation continues to also be on the minds of investors, especially with June’s year-over-year consumer price index (CPI) rate of 5.4%, the highest reading since August 2008. On the flip side, retail sales numbers released Friday came in better-then-expected, rising 0.6% in June compared to expectations of a 0.4% decline. “Inflation is still being driven by a relatively narrow range of goods and services impacted by the pandemic,” UBS said in a note.
Dow futures are down more than 500 points this morning on continued fears that the Delta COVID variant will slow the worldwide economic recovery. There will be more corporate earnings reports this week, and expectations are high for dramatic increase in earnings from last year.