Wall Street remained hesitant for a long time, then heaviness prevailed (the three main indices ended in the red, but the gaps remained marginal).
The S&P500 and Dow Jones retreated by -0.15% (to 5,555 and 40,358 respectively), the Nasdaq-100 ended down -0.35% (to 19.754, but the Composite gave up only -0.05%) and the Russell-2000 broke away with +1% to 2,243, confirming the thesis of ‘sector rotation’ in favor of small caps.
Semiconductors continued to fall sharply, with Paccar -11%, NXP -7.6%, On Semi -5%, Microchip -4%. The other heavyweight sector was energy, with Diamondback -3.1%, Chevron or Devon -1.8%, Valero -1.5%.
Tesla, which had ended down -2%, lost -3.5% in the after-hours with the confirmation of a slowdown in sales growth: earnings came in almost 20% below expectations (at $0.52), but this was partly offset by sales of $25.5 billion, and cash flow exceeded $3.6 billion.
Overall, 2nd quarter results turned out – as usual over the past 15 years – to be better than expected: at this stage, 80% of companies have announced results ahead of expectations, compared with a ten-year average of 74%.
The ‘number of the day’ concerned existing home sales in the USA: they fell by 5.4% in June compared with the previous month, to a seasonally-adjusted annual rate of 3.89 million, according to statistics published by the NAR.
The median sales price of existing homes rebounded by 4.1% compared to June 2023 to reach an all-time high of $426,900: housing has never been so unaffordable for the greatest number of Americans.
On the bond market, US Treasury yields reacted little to the weekend’s political events, nor to the nomination of Kamala Harris to face Donald Trump by November 5, and the ’10 yr’ ended virtually stable at 4.26%.
Macro and microeconomic concerns take over again with a week to go before the Fed meeting: what will growth be like in Q2, is inflation under control, what will earnings be like in Q3? A second rate cut in December will depend on the signs of a slowdown that are slowly taking shape.
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