Jul 16, 2021
Equity markets began pulling back on Thursday despite what has been much better than expected earnings from the vast majority of S&P 500 companies. Investor sentiment soured in the face of hotter than expected inflation data and testimony from FOMC chief Jerome Powell. The combination has the market wondering if an interest rate hike might come this year although the Fed seems committed to its dovish stance. If so it would drastically alter the economic Outlook.
Friday's trading may be volatile because there are few economic data points or earnings releases to drive trading action. Next week, things will be different as the peak of earnings season gets into full swing. Reports from Netflix, Chipotle Mexican Grill, and the Boston Beer Company will be closely watched for signs of strength or weakness within the economy. There are few economic reports due next week that include key reads on the housing sector and the Index of Leading Indicators.