The market staged a strong, well-received mid-week rally
This week was marked by a somewhat shaky but nevertheless encouraging rally by the broader market, as upbeat earnings gave sentiment a boost. Coming off last week’s impressive surge, the market pulled back by the end of the day on Monday as recession fears crept back in. The following day, however, all three major benchmarks scored their best days since June 24, with the Dow Jones Industrial Average (DJI) logging a 754-point win. Stocks stayed strong through the middle of the week until Friday’s dip, with the Nasdaq Composite (IXIC) stringing on three-straight triple-digit gains. At this point, all three indexes are on track for strong weekly wins.
Notable Earnings Reports
Earnings season was in full swing this week. Bank earnings took the spotlight at the beginning of the week — when Goldman Sachs‘s (GS), report injected some positivity into the market on Monday. Dow members IBM (IBM) and Johnson & Johnson (JNJ) stepped into the earnings confessional as well, with the former experiencing a sharp downturn after the company’s warning regarding its free cash flow for the year.
Netflix (NFLX) kicked the FAANGs off on Wednesday with a lackluster quarterly report. Most notably, the streaming service announced a narrower-than-expected subscriber loss, and forecast strong subscriber growth for the next quarter. Elsewhere, analysts reacted to Tesla (TLSA) earnings on Thursday, while Snap’s (SNAP) post-earnings plummet sent the Nasdaq spiraling on Friday.
Alternative Energy Making Headlines
U.S President Joe Biden announced a series of executive actions regarding climate change on Wednesday, following the collapse of a more ambitious bill — which sent alternative energy stocks lower last week. Piper Sandler downgraded Sunrun Inc (RUN) and Sunnova Energy International Inc (NOVA) amid the news, citing risky cash flow prospects due to the potential recession. Meanwhile, Array Technologies Inc (ARRY) ran into a historically bullish trendline on the charts as it rebounded from last week’s slump.
Rate Decision Coming Up Next Week
Next week could bring a major interest rate decision from the U.S. Federal Reserve, with many expecting a full-basis point hike after June’s red-hot inflation reading. Meanwhile, the earnings docket is packed with several big reports, including those from a few FAANG stocks. Meanwhile, see how markets may respond after the aforementioned CPI reading.