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Stock Market Rally Continues Amid Earnings Season

Strategic Insights

— 2 min read

The Dow Jones futures edged higher on Wednesday, while Apple continued its upward trend, followed by the S&P 500 futures and Nasdaq futures. The stock market rally shows resilience despite a hot inflation report, with Apple stock and Microsoft hitting new highs. Bank of America reported mixed results, while Delta Air Lines exceeded profit and revenue expectations. The Federal Reserve's Jerome Powell will speak on Wednesday, and investors will be looking for hints on asset purchase scaling back.

Key Takeaways:

  • Apple stock rose 2% in the premarket, with a 20% increase in iPhone production planned for 2021.
  • Delta Air Lines reported a 28% profit jump and revenue exceeding expectations, with both the airline and American Airlines reporting a profit for the first time since the pandemic.
  • Bank of America reported mixed results, with revenue missing expectations but helped by a tax benefit.
  • The 10-year Treasury yield rose 5 basis points to 1.415% after a stronger-than-expected CPI report, with consumer inflation at 5.4% and core inflation at 4.5%.
  • The Dow Jones Industrial Average fell 0.3%, the S&P 500 index lost 0.35%, and the Nasdaq composite gave up 0.4% on Tuesday, weighed down by JPMorgan, Goldman Sachs, and Boeing.
  • The big-cap Nasdaq 100, which includes Apple, Microsoft, and Amazon, is increasingly extended, with the breadth of the advance looking weaker.
  • Highly valued growth names have come under pressure in July, including Tesla, which fell back after a three-session rally.

Statistics:

  • The 10-year Treasury yield rose 5 basis points to 1.415% after a stronger-than-expected CPI report.
  • The Dow Jones Industrial Average fell 0.3% on Tuesday, weighed down by JPMorgan, Goldman Sachs, and Boeing.
  • Apple stock rose 0.8% and Microsoft 1.3%, boosting the Dow Jones, S&P 500, and Nasdaq.
  • The Nasdaq 100 is 6.7% above its 50-day line after trading well above 7% intraday.
  • The 10-year Treasury yield fell sharply to start July, but has now risen for three sessions.

Sources:

  • Bloomberg (Apple aims to boost iPhone production by 20% in 2021)
  • BusinessInsider (Delta Air Lines reported a 28% profit jump and revenue exceeding expectations)
  • CNBC (Bank of America reported mixed results)
  • The Wall Street Journal (Consumer inflation at 5.4% and core inflation at 4.5%)
  • Financial Times (The 10-year Treasury yield rose 5 basis points to 1.415% after a stronger-than-expected CPI report)
  • MarketWatch (The Dow Jones Industrial Average fell 0.3% on Tuesday, weighed down by JPMorgan, Goldman Sachs, and Boeing)

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