Week of July 12, 2021

Another volatile week on Wall Street last week, with investors seeing a major sell-off followed by new all-time records.  Concerns over a weakening global economy and fears of a much more sluggish economic recovery triggered a broad sell-off last Thursday, May 8, across the three major U.S. stock markets.  Then came Friday when concerns and fears were all but forgotten and investors went on a buying spree with the Dow jumping 448 points, or 1.3%, and the S&P 500 and NASDAQ each gained about 1% - all three logging record closes.

“Sentiment in equities remains bullish, but the Delta variant is a headwind for that.  There’s ongoing concern, what if reopening is difficult to do?” said John Roe, head of multi-asset funds at Legal & General Investment Management.

This will be a busy week of economic and corporate earnings reports.  Key inflation reports are due to be released this Tuesday and Wednesday, answering questions about whether increasing price pressures are transitory as the Federal Reserve believes.  Also, second-quarter earnings reporting season is set to get underway this week – and if estimates for incredible growth come to pass, such results could validate a market that continues to easily shake off any concerns about reaching record high after record high.  Names like JPMorgan, Chase, Goldman Sachs, Bank of America Citicorp, Wells Fargo and Morgan Stanley kick off the week for the banking sector.