Weekly Market Review & Analysis For July 26, 2021   

The indices market such as S&P 500, DJI Average, and Nasdaq Composite concluded the week in a negative zone, above all the Nasdaq, after establishing intraday session and record highs to commence the week. The small-cap Russell 2000 bettered and gained 0.8%.  

It was a very active week, mildly speaking, from analyzing a ton of earning news reports to examining the Fed's most recent policy option and sorting through the latest economic numbers and coronavirus headlines propaganda.

Beginning with earnings, Apple, Microsoft, Amazon, Alphabet, and Facebook, which constitute approximately 22% of the S&P 500's index market capitalization, all struggled this week after steadily reminding investors and traders that their incredible growth over the twelve months is likely to moderate.  

Facebook and Apple announced cautious forecasts due to challenging year-to-year computations, while Amazon went as far as implementing below-consensus earnings guidance for the Q3 (third quarter). All this fits rightly with the top growth narrative, which was augmented by mixed economic statistics and the ongoing spread of the Delta variant - wait until they get to Omega one. 

For June, new home sales, durable goods orders, and the advance estimation for second-quarter GDP all missed expectations. However, on the positive side, second-quarter GDP increased at a sound annual rate of 6.5%. The consumer confidence release for July was much better than expected. Also, the previous month's Personal Income and Spending numbers featured much better-than-feared Personal Consumption Expenditures Price Index inflation data and better-than-expected spending numbers.  

Undeterred by the mega-capitalization losses, the equity market hung in there, as the Federal Reserve delivered no changes to its exceptionally accommodative economic policy stance. Fed Chair Jerome Powell took it even further and stated that there is still some time until substantial further progress has been made to attain the Fed's employment aim.

Powell's remark was helpful for risk sentiment. While it might not have seemed like it from an S&P 500 index viewpoint, seven of the eleven index sectors did finish in positive territory. At the same time, the mega-caps put full-court pressure on three of those sectors: consumer discretionary with -2.6%, communication services with -1.0%, and information technology posting a -0.7%.

The materials sector posted +2.8% and with energy sector with the print of +1.6% were the sectors that masted good gains. In comparison, the financials with +0.7%, health care with +0.5%, real estate with +0.3%, utilities with +0.3), and consumer staples with +0.2% were the sectors which rose moderately.