All major averages gained for another winning week, capping the best month for stocks in 2022. It was also a week that perfectly represented why forecasts matter more often than the actual numbers reported. On the macro front, in addition to the Fed’s 75 basis point rate hike on Wednesday, we got the advance reading of the Q2 Gross Domestic Price Index that indicated the second consecutive quarter of economic contraction. Historically, two consecutive contractions in GDP indicate an economic recession. However, historically, you also don’t see an unemployment rate of 3.6% during a recession. Call it what you want but the one thing that is clear is that the economy is slowing. Then, in terms of earnings, we heard from the names of the major companies responsible for more than 20% of the market valuation of the S&P 500 Index. Despite mixed results and guidance from all of them, these stocks (excluding Meta Platforms) were able to respond favorably. Therefore, it can be said that the worrying economic data along with the mixed earnings releases. However, we managed to rally with the Dow up nearly 3% this week, the S&P 500 advancing 4.2% over the week and the Nasdaq jumping 4.7%. In our view, the market’s ability to ignore these weak economic conditions and mixed earnings results from the major stock market leaders is a sign that investors have been anticipating these updates and may have finally priced in the economic reality in the market, providing the ingredients for a near-term bottom. While this does not mean that we are unleashing upwards in a straight line, it does give reason to be more optimistic as we move forward with some breathing room to allow the economic picture to develop. Before we move forward, one final note about the hotter-than-expected inflationary reading. Although it was above expectations, it is important to remember that these readings are looking back (it was a June reading and we are now at the end of July). As a result, investors may not place as much weight on the print data as the Federal Reserve raised interest rates this week by 75 basis points. That plus the quarterly earnings suspension from management teams we got this week beats out the old data. Under the hood this week, all S&P sectors closed higher as energy led to the upside, followed by utilities and industry. Meanwhile, the US dollar index settled around the 106 level. Gold is standing at around $1,760 an ounce. West Texas Intermediate crude prices remained at just under $100 a barrel. The 10-year Treasury yield fell to 2.65%. Looking back, we received earnings results from Microsoft (MSFT), Alphabet (GOOGL), Humana (HUM), Meta Platforms (META), Qualcomm (QCOM), Ford (F), Linde (LIN), and Honeywell (HON), Apple (AAPL), Amazon (AMZN), Chevron (CVX), AbbVie (ABBV), and Procter & Gamble (PG). On the macroeconomic front: On Tuesday, new home sales were reported to have fallen 8% in June and 17% annually. Then on Wednesday, pending home sales were reported to have fallen 8.6% in June and 20% annually, below estimates. Also on Wednesday, the Federal Reserve raised interest rates by 75 basis points. On Thursday, we got the advance reading of the second-quarter GDP, which indicated a contraction of 0.9%, missing expectations for a 0.3% expansion. Also Thursday, initial jobless claims for the week ending July 23 came in at 256,000, missing expectations of 250,000. Finally, on Friday, we got the personal spending report for June, which indicated a 4.8% annual increase in the core PCE price index (the Fed’s preferred measure of inflation), slightly higher than the 4.7% expected. What’s future under the portfolio, we’ll hear from Devon Energy (DVN) on Monday after the close; from Advanced Micro Devices (AMD) and Coterra Energy the Tuesday after the bell; It is Eli Lilly (LLY) on the Thursday before the opening bell. Here are some other earnings reports and economic numbers to watch next week: Monday, August 1 before the bell: Builders FirstSource (BLDR), Jacobs Engineering (J), Global Payments (GPN), ON Semi (ON), JELD-WEN (JELD) ), Aerojet Rocketdyne (AJRD), Affiliate Managers (AMG), Check Point Program (CHKP) After the Bell: Mosaic (MOS), Aflac (AFL), CF Industries (CF), Avis Budget (CAR), Univar Solutions (UNVR) DaVita (DVA), Diamondback Energy (FANG), Williams Cos (WMB), Sanmina (SANM), Activision Blizzard (ATVI), Leggett & Platt (LEG), Simon Property (SPG), Arista Networks (ANET), Pinterest (PINS), Vornado Rlty (VNO) 10:00 AM ET: ISM Manufacturing PMI Tuesday, August 2 Before the bell: Marathon Petrol (MPC), Caterpillar (CAT), Uber (UBER), Cummins (CMI), Eaton (ETN) ), Lear (LEA), Marriott (MAR), Illinois Tool (ITW), Leidos (LDOS), DuPont (DD), Henry Schein (HSIC), S&P Global (SPGI), Molson Coors (TAP), JetBlue ( JBLU), Arconic (ARNC), KKR (KKR), F errari (RACE), IDEXX Labs (IDXX), to wer Semi (TSEM) after the bell: Prudential (PRU), Occidental Petro (OXY), Starbucks (SBUX), PayPal (PYPL), Gilead (GILD), Caesars Ent (CZR) ), AirBnB (ABNB), GXO Logi (GXO), Electronic Arts (EA), Cirrus Logic (CRUS), SoFi (SOFI), Alteryx (AYX) Wednesday, August 3 before the bell: CVS (CVS), AmerisourceBergen (ABC) , Enterprise Products (EPD), CDW (CDW), Sunoco (SUN), Trane (TT), Exelon (EXC), Moderna (MRNA), Berry Global (BERY), BorgWarner (BWA), Regeneron (REGN), Yum ! Brands (YUM), Under Armor (UAA), Vertiv (VRT), Spirit Aero (SPR), Generac (GNRC), Brinks (BCO), Horizon Pharma (HZNP) after the bell: McKesson (MCK), Energy Transfer (ET) )), MetLife (MET), Nutrien (NTR), Plains All American (PAA), Allstate (ALL), Lumen Tech (LUMN), Lincoln National (LNC), Booking Holdings (BKNG), DXC Tech (DXC), MGM (MGM), MercadoLibre (MELI), Altice (ATUS), eBay (EBAY), Marathon Oil (MRO), Clorox (CLX), Sprouts Farmers (SFM), Albermarle (ALB), Ingersoll-Rand (IR), Qorvo ( QRVO)), Real Estate Income (O), 10:00AM ET: Factory Orders 10:00AM ET: ISM Services PMI Thursday, August 4th before the bell: Alibaba (BABA), Cigna (CI), ConocoPhillips (COP) ), Arrow Electric (ARW), CBRE Group (CBRE), Paramount Global (PARA), Johnson Controls (JCI), WestRock (WRK), NRG Energy (NRG), Duke Energy (DUK), Becton Dickinson (BDX), Aptiv (APTV), Parker-Hannifin (PH), Kellogg (K), Wayfair (W), Air Products (APD), Zoetis (Z TS), PerkinElmer (PKI), Crocs (CROX), AZEK (AZEK), Datadog (DDOG), Shake Shac k (SHAK) after the bell: Suncor Energy (SU), Warner Bros. Discovery (WBD), Amgen (AMGN), Corteva (CTVA), EOG Resources, Block (SQ), Opendoor Tech (OPEN), Carvana (CVNA), Live Nation (LYV), XPO Logi (XPO), Con Edison (ED), AES (AES), Motorola Solutions ( MSI), Rocket Companies (RKT), DoorDash (DASH), Skyworks (SWKS), Lyft (LYFT), Twilio (TWLO), Dropbox (DBX), Global Screen (OLED) 8:30 a.m. ET: Initial jobless claims Friday August 5 before the bell: Goodyear Tire (GT), Western Digital (WDC), Telus (TU), Flour (FLR), Adient (ADNT), Wabtec (WAB), DraftKings (DKNG), Canopy Growth (CGC), Twist Bio (TWST) 8:30 a.m. ET: Nonfarm Payroll (See here for a full list of stocks in Jim Cramer’s Charitable Trust.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable fund portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. 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All major averages gained for another winning week, capping the best month for stocks in 2022. It was also a week that perfectly represented why forecasts matter more often than the actual numbers reported.
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