Read the top 10 stories to remember the week which ended July 2nd.
#1: Oil at $75… and rising?
U.S. crude oil prices rose for the sixth week in a row, bursting past the $75 per barrel line on Thursday and Friday which is the highest level since October 2018. Prices have gained around 55% year to date after starting 2021 at around $48.50. Analysts at Bank of America expect oil to reach $100 a barrel in 2022. Others disagree with this statement.
#2: U.S. markets continue their record setting ways
The major U.S. stock indexes posted incremental daily gains throughout the week, rising around 2% overall. The S&P 500 and NASDAQ added to their record highs set the previous week and the Dow eclipsed a record that is set nearly two months prior. This is a fifth consecutive quarterly advance for the American markets with large-cap growth stocks leading the gains.
#3: Nike saw 15% share price surge upon earnings report
Nike stood out this week after seeing a 15% surge in share price, a rise that stemmed from $50B in sales and the company’s Jordan brand seeing yet more momentum. Sales in China have improved, with Nike management saying the firm is confident about its ability to regain trust with customers there. In North America, sales more than doubled to a record $5.38B.
#4: Chinese stocks fell this week
Both the largest Chinese indexes Shanghai Composite Index and large-cap CSI 300 posted a weekly loss after each index noted its biggest one-day percentage drop since early March. Reports of profit-taking by domestic investment funds and open market operations undertaken by China’s central bank to drain funds from the financial system could have contributed to the declines.
#5: US jobs report improved!
The pace of job growth accelerated in June, rebounding from recent moderation in the U.S. labor market’s recovery from the pandemic. The economy generated 850,000 new jobs last month, exceeding most economists’ expectations for around 700,000. In April and May, job growth totaled 269,000 and 583,000, respectively.
#6: Banks announced increased dividend payouts
Several of the biggest U.S. banks announced plans to increase their dividend payments to shareholders in the wake of the latest round of regulatory stress tests to gauge their ability to withstand economic shocks. The U.S. Federal Reserve said all 23 banks that took this year’s stress test passed.
#7: A return to large-cap growth stocks?
The second quarter produced a reversal in U.S. market leadership between the value and growth equity styles. An index of large-cap growth stocks returned nearly 12%, while its value counterpart added just over 5%. However, value remained the leader through the first half of 2021 with a 17% return to growth’s 13%, as value outperformed in the first quarter.
#8: H2 strong form for U.S. equities
Through Wednesday’s close of the first half of the year, U.S. stocks extended their strong run that began in the spring of 2020. The S&P 500 posted a 15.3% return through the first six months of this year, and all 11 sectors were positive. Energy had the biggest gain at 45.6%; utilities was the weakest at 2.4%.
#9: Elevated inflation still a concern for Brazil
Elevated inflation remains a chief concern for investors in Brazil, and while the central bank has begun raising interest rates in response, T. Rowe Price sovereign analyst Richard Hall expects additional near-term inflation pressures stemming from rising electricity costs. During the week, the country’s electricity regulator announced a 50% increase in a tariff surcharge starting in July.
#10: Chile’s ministry to sell US-denominated assets
Chile’s ministry of finance said it step up its sales of dollar-denominated assets from Chile’s sovereign wealth fund to help finance the USD 10.8 billion fiscal package announced at the end of May to aid the economic recovery. The package, which the legislature approved in June, includes support for households, such as a universal emergency basic income for most citizens; smaller businesses, such as greater tax benefits; and the health system’s broad coronavirus vaccination efforts.
