Weekly Recap

• A shift in trading this week led to two major indexes going into the red. The NASDAQ fell nearly 4% for the week, breaking six weeks of gains. The S&P 500 fell around 2% for the week while the Dow fell on Friday but still saw a nearly 1% gain for the week.
• This is the second week that the U.S. small-cap stock benchmark outperformed by a wide margin. It posted a 1.7% total return while its large-cap counterpart fell 1.8%. 
• U.S. large-cap value stocks outpaced their growth counterparts for the second week in a row. Over the past two weeks, a value benchmark has risen a total of 3.5% versus a 4.3% decline for its growth counterpart.  
• There was an uptick in expectations for quarterly earnings in their second week. Based on initial results and forecasts for upcoming reports, analysts on Friday were expecting S&P 500 companies to post average second-quarter earnings increase of 9.7% compared with the same quarter a year earlier, according to FactSet. 
• U.S. retail sales were kept the same in June. This is compared to economists who had projected a decline of roughly 0.4%. 
• The latest weekly count of initial unemployment claims rose to 243,000.
• The European Central Bank kept its key interest rate unchanged.
• The U.S. dollar index climbed after stronger-than-expected data on the U.S. labor market.
• Oil slipped. Oil prices saw their second straight weekly loss.

Most Active Stocks

• Nvidia Corp. (NVDA)
• Walgreens Boots Alliance (WBA)
• Tesla (TSLA)
• Intel Corporation (INTC)
• Ford Motor Company (F)

Biggest Gainers

• Coinbase Global (COIN) +10.53%
• MicroStrategy Incorporated (MSTR) +14.36%
• Riot Platforms (RIOT) +9.86%
• Iris Energy Limited (IREN) +10.46%
• Starbucks Corporation (SBUX) +6.85%

Biggest Losers

• CrowdStrike Holdings (CRWD) -11.10%
• Wipro Limited (WIT) -11.61%
• Autoliv Inc. (ALV) -10.06%
• The Travelers Companies (TRV) -7.76%
• Teradata Corporation (TERA) -10.24%

Weekly Notables

Morgan Stanley has High Hopes for Gold

Morgan Stanely anticipates gold prices to rise over $2,500 by Q4. According to Morgan Stanley commodity strategists, the rally in gold is driven primarily by the physical market, with central bank purchases doubling in 2022/23 compared to previous trends. Retail buying has also increased in 2024.  "While US recession fears are rising, our economists still see a soft landing with a stronger Fed reaction if the data turns weaker, either of which should support investor gold inflows,” strategists led by Amy Gower said in a note

CrowdStrike and One of the World's Biggest IT Blackouts

Major companies worldwide, from banks to airlines, were affected by an IT blackout caused by a software update from CrowdStrike. The update had caused Windows to crash due to a fault in the way the Texas-based cybersecurity company's software update interacted with Windows. CrowdStrike is a cybersecurity vendor that develops software to help companies detect and block hacks. It is used by many of the world’s Fortune 500 companies, including major global banks, health-care and energy companies.

US FAA is Probing the Latest Southwest Airlines Flight 

The Federal Aviation Administration (FAA) has announced that it is investigating a Southwest Airlines flight after it flew at a very low altitude over Tampa Bay, Florida. The July 14 flight by a Southwest Boeing 737 MAX left from Columbus, Ohio, and was approximately 3 miles from the Tampa airport when it dropped to as low as about 175 feet according to Flightradar24 data. Southwest said it is in contact with the FAA "to understand and address any irregularities" following the July 14 flight. "Nothing is more important to Southwest than the safety of our customers and employees.

The Week Ahead

• U.S. GDP is expected this week. The U.S. government’s initial estimate of second-quarter GDP is expected to show that the economy accelerated relative to the first quarter, when GDP grew at a 1.4% annual rate. An estimate released on Wednesday by U.S. Federal Reserve economists projected a second-quarter growth rate of 2.7%. The results will be in on Thursday.   
• Home sale data is on the way. On Tuesday data from the National Association of Realtors will show existing home sales. Investors can then look for new home sales on Wednesday from the U.S. Census Bureau.
• Second-quarter GDP data. On Thursday there will be an advance estimate from the U.S. Bureau of Economic Analysis.
• Weekly unemployment claims. On Thursday investors can also look forward to weekly unemployment claims from the U.S. Department of Labor.
• Durable goods orders data. Durable goods data is additionally set for Thursday from the U.S. Census Bureau.
• Key data on consumer sentiment. The University of Michigan Index of Consumer Sentiment will be released on Friday. 
• Earnings Calendar for this week. Major companies reporting earnings this week include Alphabet, Coca Colca, First Bankcorp, Freeport McMoRan, Verizon Communications, Spotify, UPS, General Motors, and Lockheed Martin.

Earnings Spotlight: Alphabet

Google's parent company Alphabet is in the spotlight this week for earnings. The company is set to report its Q2 report after Tuesday's close.  According to CFRA Research analyst Angelo Zino, Wall Street will be watching for updates on "margin expansion, artificial intelligence (AI) momentum, and growth trends across the company's three core segments (Cloud, Search, and YouTube)."  Zino currently has a "BUY" rating and believes "cloud growth could surprise to the upside," with the analyst forecasting a 25% year-over-year (YoY) increase in both Q2 and Q3. He also expects the report to show that digital ad trends remained healthy over the three-month period. Analysts, on average, expect Alphabet to report second-quarter earnings of $1.84 per share (+27.8% YoY) on revenue of $84.2 billion (+12.9% YoY).