The stock markets in the United States declined primarily due to the renewed concerns of investors regarding the slowing economic growth in China and other developing countries.
The improvement of the U.S. housing market was overshadowed by the selloff of equities in the commodities sector. The Department of Commerce reported that the privately-owned residential starts increased 0.2% to an adjusted annual rate of approximately 1.21 million in July. The single-family housing starts increased 12.8% to 782,000.
ADW Capital’s 2020 letter: Long CDON, the future Amazon of the Nordics
ADW Capital Partners was up 119.2% for 2020, compared to a 13.77% gain for the S&P 500, an 11.17% increase for the Russell 2000, and an 8.62% return for the Russell 2000 Value Index. The fund reports an annualized return of 24.63% since its inception in 2005. Q4 2020 hedge fund letters, conferences and more Read More
Eric Green, head of U.S. economic research ar TD Securities told Bloomberg, “Housing is in a real sweet spot, moving higher but not dangerously so. The housing market will be strengthening over the second half. The Fed raising rates will not change that.”
The richest investors in China are exiting the equity market. The number of traders with stockholdings worth more than $1.6 million or 10 million yuan in their account declined 28% last month, according to Bloomberg based on the country’s clearing agency.
Hu Xingdou, an economics professor at the Beijing Institute of Technology, commented, “Wealthy investors, who have been through bear markets, are better at exiting.”
Bill Schultz, chief investment officer at McQueen, Ball & Associates, said, “We’re seeing China dominating headlines and concern the consumer is not all in right now. Until this economic environment and earnings stabilize, we’re going to continue to see the back-and-forth in stocks.”
- Dow Jones Industrial Average (DJIA) – 17,511.34 (-0.19%)
- S&P 500- 2,096.92 (-0.26%)
- NASDAQ- 5,059.35 (-0.64%)
- Russell 2000- 1,214.90 (-0.83%)
- EURO STOXX 50 Price EUR- 3,495.38 (-0.07%)
- FTSE 100 Index- 6,526.29 (-0.37%)
- Deutsche Borse AG German Stock Index DAX- 10.915.92 (-0.22%)
- Nikkei 225- 20,554.47 (-0.32%)
- Hong Kong Hang Seng Index- 23,474.97 (-1.43%)
- Shanghai Shenzhen CSI 300 Index- 3,825.42 (-6.09%)
Stocks in Focus
The stock price of Home Depot climbed 2.58% to $122.79 per share. The company reported quarterly earnings of $1.73 per share on $24.8 billion revenue. Wall Street analysts expected the company to deliver earning of $1.71 per share on $24.7 billion in revenue. Home Depot also raised its 2015 profit outlook to as much as $5.36 per share.
Wal-Mart Stores declined 3.37% to $69.49 per share after reporting earnings that missed the expectations of Wall Street analysts. The retail giant generated earnings of $1.08 per share, lower than the $1.12 per share consensus estimate. Wal-Mart also reduced its full-year earnings guidance to a range of $4.40 to $4.70 per share from its previous estimate of around $4.70 to $5.05 per share.
The stock value of Freeport-McMoRan dropped 3.12% to $9.92 per share. The company was negatively impacted by the declining prices of copper. Zacks Equity Research recommended a Hold rating on the stock over the short-term.