Companies featured in this edition of the newsletter: None
This week the stock market flirted with its first weekly decline in 4 weeks, but managed to secure another round of weekly gains. This past week featured several quarterly earnings, and next week central banks will be back in the spotlight starting with the Wednesday policy statement from the Federal Reserve. The Dow finished the week at 18,570 up 54 points or 0.3% from 18,516 last week, and it is up 6.6% for the year. The Nasdaq finished the week at 5,100 up 70 points or 1.4% from 5,029 last week, and it is up 1.9% for the year. The S&P 500 finished the week at 2,175 up 13 points or 0.6% from 2,161 last week, and it is up 6.4% for the year. The Russell 2000 finished the week at 1,212 up 7 points or 1,205 last week, and it is up 6.8% for the year.
Housing starts jumped 4.8% to a seasonally adjusted annual rate of 1.189 million units in June on the heels of a downwardly revised 1.135 million in May. Building permits increased to a seasonally adjusted annual rate of 1.153 million while the prior month saw a small downward revision to 1.136 million from 1.138 million. Initial claims for the week ending July 16 were 253,000, a decrease of 1,000 from the prior week. Continuing claims for the week ending July 9 dropped to 2.153 million in the prior week. The Philadelphia Fed Index produced a deadline disappointment for July, falling to -2.9 from 4.7 in June. Existing home sales increased 1.1% in June to a seasonally adjusted annual rate of 5.57 million. Existing home sales in May were revised from 5.53 million to 5.51 million. There were no surprises with the release of the Conference Board’s Leading Economic Index for June. Every component index contributed to the monthly increase, with the exception of the average workweek in manufacturing and average consumer expectations for business conditions. Over the first half of the year, the Leading Economic Index increased 0.3%, which is roughly the same pace seen in the second half of 2015, according to the Conference Board.
In earnings news, Bank of America reported 2Q 2016 net income of $4.2 billion or $0.36 per diluted share, compared with $5.1 billion or $0.43 per share in 2015. Johnson and Johnson reported net income of $4.0 billion or $1.43 per diluted share in 2Q 2016 compared with $4.5 billion or $1.61 per share in 2015. UnitedHealth reported net earnings of $1.8 billion or $1.81 per diluted share compared with $1.6 billion or $1.64 per share in 2015. Microsoft reported FY16 Q4 net income of $3.1 billion or $0.39 per diluted share compared with a net loss of $(3.2) billion or $(0.40) per share last year. Intel reported GAAP net income of $1.3 billion or $0.27 per diluted share compared with $2.7 billion or $0.55 per share in 2015.
General Motors reported net income of $2.9 billion or $1.81 per diluted share compared with $1.1 billion or $0.67 per share in the same quarter a year ago. AT&T reported net income of $3.4 billion or $0.55 per diluted share compared with $3.1 billion or $0.59 per share last year. American Airlines reported GAAP net income of $950 million or $1.68 per diluted share compared with $2.4 billion or $2.41 per share in 2015. Lastly, General Motors reported GAAP net earnings of $2.7 billion or $0.30 per diluted share compared with a net loss of $(1.4) billion or $(0.13) per share last year.
No conferences of note will be taking place this week.
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