Lions, Kittens, and a Sideways Market — Stock Market July 26–30 2021

Here’s the weekly rundown — July 26–30, 2021

Weekly Summary:

Forget bulls and bears, this week was the story of lions and kittens. After record highs last week, major indexes did a whole lot of sideways as investors were greeted by kittens instead of the lions they were expecting on quite a bit of economy/market data.

Continuing excellent earnings from last week, the lions of the week came Tuesday with the earnings reports from the behemoth companies Microsoft and Alphabet both crushing wall street expectations. Apparently, YouTube really holds the answer to everyone’s question as Alphabet reported YouTube revenue up 83% around $7 billion, which, is nearly the revenue of Netflix..🤔

Unfortunately by Thursday, the kittens showed up the biggest one being the GDP numbers reported by the commerce department. While the market was expecting a number around 8.4% growth the actual number turned out to be only 6.5% growth… 2% below expectations and adjusted for inflation resulting in true growth of only 1%.

Taking these major events into consideration along with other parallel information the week can be summed up as neither great nor bad which explains the sideways market.

So we get it, the big boys got bigger, the economy is only so so, and the market is flat but what’s actually the most interesting action of the week? Robinhood went public… and in a rather unspectacular fashion drops 8% alone on its first trading day.

Negative Mortgage Rates — why housing isn’t slowing

Last week we threw negative mortgage rates into our headline and said we’d explain it this week, so here’s how it works.

If the rate of inflation is 5.5% annually and the national average for a 30-year conventional mortgage is 3% then we subtract 5.5% from 3% leaving us at -2.5%. The -2.5% is the “real” rate rather than the nominal rate.

learn more about real vs nominal.

The Major Headlines:

😷 Facemasks at Walmart Coming Back Vaccine requirements at Google and Facebook

Love them or hate them facemasks may die a slow death as some companies are looking at requiring them again.

🇨🇳. China Continues to Crackdown on Tech Leaving Chinese Companies US Shares to Suffer

Leave no doubt, the CCP is the boss in china and will not have its authority or influence messed with by anybody. The headline printed by china’s main technology-sector regulator is that this is in the interest of eliminating anticompetitive practices and reforming how China’s largest tech companies operate. Regardless, the recent moves out of the Chinese government have been at the expense of US investors in these companies.

🚗. Tesla has Record Quarterly Profit of $1.1 Billion

The superpower of electric cars just got stronger posting a massively quarterly profit of $1.1 Billion. This is a result of growing demand for electric-powered cars and Tesla’s ability to produce significantly more vehicles than it previously was able to. The biggest struggle and potential problem for Tesla is sourcing chips.

🏈 Texas and Oklahoma to leave the Big 12.

Texas and Oklahoma intend to leave the Big 12 conference seeking bigger paydays, better players, and better competition. While the teams initially planned to leave the conference the SEC quickly and unanimously extended an invitation to both schools to join. Playing in the SEC, however, would not take place until 2025.

Want this in your inbox? Get it for free

Originally published at https://speckandcompany.com on July 30, 2021.