Weekly Stock Market Review for July 28th: An In-depth Analysis with Mary Ellen McGonagall
- July 28, 2023
- 11:33 am
Second-quarter GDP numbers showcased an increase to 2.4 percent, higher than the anticipated 2 percent level, leading to a rise in interest rates.
Weekly Stock Market Review for July 28th: An In-depth Analysis with Mary Ellen McGonagall
Mary Ellen McGonagall is here for another session of our Weekly Stock Market Review this sunny Friday, July 28th.
Every week, we break down the financial world into easy-to-understand pieces. We focus on top-performing sectors, how to make the most of rising market trends, and recap the news that affected last week’s market prices. Additionally, we’ll give a sneak peek at factors that might be key in the coming week.
In simpler words:
- We identify the best-performing sectors.
- We help you benefit from rising markets.
- We look back at news impacting last week’s market.
- We highlight potential influences for next week’s market.
- With this info, we aim to make you more comfortable with the financial markets. Stay tuned for more with our Weekly Stock Market Review!
Unpacking the GDP Numbers
Let’s dive into one of last week’s highlights: the announcement of the second-quarter Gross Domestic Product (GDP) numbers. Economic analysts had forecasted an optimistic increase of 2 percent. However, the economy surpassed everyone’s expectations with a strong growth rate of 2.4 percent. This particular uptick signals an economy buzzing with activity, which in turn led to a corresponding increase in interest rates. The rationale behind this rate hike is that the Federal Reserve is likely to take such action in a rapidly growing economy to prevent it from overheating.
Federal Reserve in Action
Let’s pivot to another notable event that transpired last week. The Federal Reserve, the nation’s central bank, decided to hike the interest rates by a quarter of a percent. While financial analysts predicted this decision and didn’t create a significant splash in the market, the Federal Reserve’s non-commitment towards future policy changes has injected a sense of suspense and anticipation into the market dynamics.
Keeping a Pulse on Consumer Confidence
Consumer confidence is a major market influencer. The past week we have witnessed an impressive surge in consumer confidence, which reached a two-year high. This data mirrors the GDP increase, fostering speculation among investors and analysts about an impending rate hike by the Federal Reserve in the near future.
Core PCE Data and NASDAQ’s Rally
Another interesting development was the release of the Core PCE (Personal Consumption Expenditures) data. This indicator showed that inflation was continuing its downward slope. This signal, which suggested that the spending power of consumers may not be significantly eroded, led to a two percent rally in the NASDAQ. This surge provided a much-needed respite amid the rising fears about increasing interest rates.
Performance of Mega Cap Names
The past week was a particularly good one for mega-cap names like Alphabet and Meta Platforms. These behemoths reported impressive numbers, indicating robust growth and promising future prospects. The performance of these companies is of great importance as they have a significant influence on their respective sectors and play a pivotal role in driving market trends.
Meta
Turning our attention to Meta Platforms, the company recently released its earnings report. The report was impressive, and it led to a significant increase in the company’s stock price. The stock saw a gap up and experienced a continuation rally following the release of their positive numbers. This pattern mirrors Meta Platforms’ performance during the Q4 and Q1 earnings period, where similar gaps up were observed, followed by pullbacks to the 10-day or 21-day simple moving averages and subsequent uptrends.
Alphabet
Focusing our attention on Alphabet, the report emphasized the digital giant’s promising performance as exhibited by a gap up into a base breakout. This significant surge was largely attributed to improved digital ad sales, particularly on YouTube and other platforms, which effectively fueled the stock’s growth. Noteworthy was the elevated trade volume that occurred concurrently with the Gap up, marking a continuation rally.
Interestingly, the Alphabet stock’s Relative Strength Index (RSI) wasn’t overbought, which suggests more room for upward movement. Moreover, the Moving Average Convergence Divergence (MACD) depicted a black line crossing above the red one, a bullish signal suggesting the beginning of a potential uptrend.
This, in conjunction with the steady performance of the five-day simple moving average, hints at Alphabet’s potential for further growth and suggests that the stock appears poised for continued upside, especially in response to strong earnings.
Outlook for the Coming Week
As we cast our gaze forward, market watchers will be eagerly waiting for Amazon and Apple’s earnings reports next week. These tech giants are known to heavily influence market direction. Their performance in the upcoming earnings season could very well determine the course of the stock market in the subsequent weeks.
Key Points Recap:
- Second-quarter GDP numbers showcased an increase to 2.4 percent, higher than the anticipated 2 percent level, leading to a rise in interest rates.
- The Federal Reserve raised interest rates by a quarter of a percent.
- The Federal Reserve economists predict the U.S is not entering a recession.
- Consumer confidence climbed to a two-year high, aligning with the GDP number.
- Core PCE data showed inflation continuing to cool, prompting a two percent rally in the NASDAQ.
- Amazon and Apple are set to report earnings next week.
- Mega cap names like Alphabet and Meta Platforms showed strong numbers and growth.
Conclusion
In conclusion, the past week has been brimming with activity, with key events including the release of GDP numbers, an interest rate hike by the Federal Reserve, an increase in consumer confidence, and strong performances by mega-cap names like Alphabet and Meta Platforms. As we look ahead, the market is eagerly anticipating earnings reports from tech titans Amazon and Apple, in addition to the release of the employment data for July. It is of utmost importance for every investor to stay informed and keep a close eye on these crucial indicators. Remember, knowledge is the key to successful investing. Until next week, this is Mary Ellen McGonagall; wishing you profitable investing!
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