Despite consumer sentiment index letdown, stocks eke out a record close.


Author: Maria Andretti

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There was a slight change to Stocks on Friday afternoon as the prices were set to increase, narrowly surpassing their record high; investors tried to understand the large economic data from the earning results.

Stocks Graph

The S&P 500 and Dow were among those that set the intraday highs from Thursday’s record, which made it post profits for the end of the week. Since then, the index rose from four consecutive sessions, making record highs as investors are optimistic about the economic recovery pace and strength in which the corporate profit results have stayed.

Meanwhile, Disney shares dropped even after the Dow component posted its profits that surpassed investors’ expectations in the last quarter. However, it made growth in its closely watched platform, Disney + streaming.

The shares for Airbnb fell; this was after they had forecasted a drop in the current quarter bookings because of the effect of the Delta Variant on traveling. Airbnb wasn’t the only one hit by the spike in the covid cases, DoorDash also; even if the company had expected an increase in earnings.

For the wider economy, the data for jobless claims showed a straight drop in the new filing; however, the available data is still higher than the 2019 trends. A lot of factors affect this value including the new rave for crypto, especially on platforms like Binance.

Tom Graff, Brown Advisory head of fixed income, stated, “I think the current inflation prints we’re seeing … reflect mostly transitory things, and they would calm down on their own. But I do think that once those pandemic-specific effects have passed through, there is going to be some inflation that is above the Fed’s comfort zone; I think they’re going to be able to take control of it, I think they’ll start tapering QE in [the fourth quarter] and probably wind-up hiking late in 2022 or early in 2023. And then the question becomes, how many hikes does it take? How high do interest rates need to go to get inflation back under control.”

Meanwhile, a list of records that close high for the equity market has made investors remove stock from their upward projections. For example, the S&P 500 has not seen up to a 5% reduction since October last year. But it has seen a 19% increase since the beginning of the year.

However, some investors opined that the path of least resistance is still up and running for most stocks.

One of such investors is Kevin Simpson, the founder of Capital Wealth Planning; “Under the hood, so many companies have had a 10%, 14%, 15% retrenchment from peak to trough. So, I’m not as concerned that the markets have been trending higher because a few big names hold it up. There are so many companies that had pullbacks of magnitudes that we would consider correction territory.”

Kelvin has also mentioned that the market has shown some resilience, and many companies are beginning to show new highs. Although he suggests that some volatility should still be expected, he concluded that everyone should remain optimistic.

“I would expect some volatility – I don’t know what the catalyst is. The Delta variant is the one staring us in the face as certainly the most obvious. And if we see a 10% pullback, which I’m not expecting, I would jump in and buy it with both feet.”

BWCEvent aspires to share balanced and credible details on cryptocurrency, finance, trading, and stocks. Yet, we refrain from giving financial suggestions, urging users to engage in personal research and meticulous verification.


Maria Andretti is an Administrative Assistant with eight years of experience working alongside the VP finance of a Fortune 500 company.