Market Gains To Continue In To The Second Half

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In his Daily Market Notes report to investors, Louis Navellier wrote:

ECB Surprise

The ECB surprised by increasing 50bps this morning, their first increase in 11 years. It’s not a surprise given the inflation in Europe is higher than in the US, more because the continent is already having growth issues exacerbated by the war in Ukraine and threats of energy shortfall deliveries from Russia.  The US dollar is lower against the Euro on the news.

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Q2 2022 hedge fund letters, conferences and more

Today, the Leading Index for June came in at -0.8%, lower than the -0.6% forecast, the 4th monthly drop in a row and the lowest since April '20. Also disconcerting was the Philadelphia Fed manufacturing index for new orders fell sharply to -12.3 from May's -3.3, the lowest in 26 months.

Soft Economic Numbers

Initial jobless claims for the week ended July 16th rose 7,000 to 251,000, the highest since November of 2021. Continuing claims increased to 1.38 million the highest since April.  Stocks are giving back some of their recent 6-week high today on the soft economic numbers. 

Interest rates and energy prices are lower on increased global recession fears. Crypto is also giving back some of its recent rebound off the bottom.

Continued Market Gains?

On the earnings front, AT&T (NYSE:T) beat on top & bottom but guided to lower cash flow.  The shares are down 9%.  Tesla (NASDAQ:TSLA) grew revenues 42% but fell short of estimates while beating on the bottom line albeit automotive margins fell on higher costs, and reaffirmed full-year guidance. The shares are up 4.7% this morning.

The earnings season continues and has generally been positive and driven the market higher. Estimates for 3Q & 4Q have been trimmed slightly since the first of the month but are still strong at roughly +10%, well above inflation, and should lead to continued market gains.

Coffee Beans

Japan has the most powerful passport in the world, with its citizens able to visit 193 countries without a prior visa. South Korea and Singapore come in joint second place, with their citizens able to visit 192 countries. The United States comes in at 7th place, enabling citizens to enter 186 countries without major restrictions. Source: Statista. See the full story here.