Market Perspective for July 27, 2020

Technology stocks drove the broad indexes higher on Monday. The Nasdaq climbed 1.67 percent, the Russell 2000 Index 1.16 percent, the S&P 500 Index 0.74 percent and the Dow Jones Industrial Average 0.43 percent.

SPDR Technology (XLK) advanced 1.58 percent, SPDR Materials (XLB) 1.45 percent and SPDR Real Estate (XLRE) 1.18 percent.

The Federal Reserve’s Federal Open Market Committee (FOMC) meets this week. Chairman Powell will hold a press conference following the policy statement. Investors expect no change in Fed policy from the prior meeting.

Second quarter gross domestic product will be announced on Thursday. Forecasts range from negative 35 percent to negative 15 percent.

Durable goods orders rose 7.3 percent in June, better than forecasted. Core capital goods orders increased 3.3 percent.

The Conference Board’s consumer confidence index will be out on Tuesday. Analysts foresee a slight dip to 95.5 in July. The University of Michigan’s consumer sentiment index is out on Friday. A small decline is expected as well. Economists predict initial claims for unemployment will rise to 1.51 million.

The 10-year Treasury yield rose to 0.61 percent on Monday. High yield bonds gained on the day thanks to falling credit risk. iShares iBoxx High Yield Corporate Bond (HYG) increased 0.22 percent.

iShares MSCI Emerging Markets (EEM) gained 1.55 percent and iShares MSCI EAFE (EFA) 1.31 percent.

This will be a significant week for corporate earnings. Tuesday brings Advanced Micro Devices (AMD), Visa (V), Pfizer (PFE), Amgen (AMGN), McDonald’s (MCD), Starbucks (SBUX), 3M (MMM), eBay (EBAY), Mondelez (MDLZ) and Sherwin-Williams (SHW).

Boeing (BA), Facebook (FB), Shopify (SHOP), Paypal (PYPL), Qualcomm (QCOM) and General Electric (GE) headline Wednesday reports, along with Anthem (ANTM), General Motors (GM) O’Reilly Automotive (ORLY) and Teladoc (TDOC).

On Thursday, Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Comcast (CMCSA), Mastercard (MA), Proctor & Gamble (PG), Gilead Sciences (GILD), Newmont Mining (NEM), Ford (F). Eli Lilly (LLY) and Cigna (CI) delivering earnings.

Exxon Mobil (XOM), Chevron (CVX), Merck (MRK), AbbVie (ABBV), Caterpillar (CAT) and Dominion Energy (D) close out the week.

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