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Mid-Week Market Minute 07.22.20

News |

Equities around the world continued to rally this week after the European Union reached a deal on a 750 billion euro ($860 billion) relief package. The focus will now be on the U.S., where Congress has its sights set on another round of coronavirus relief with estimates ranging anywhere from $1 trillion to $3 trillion. As of Wednesday, emerging markets were nearly 3% higher for the week while international developed markets tacked on another 2%. In the U.S., second-quarter earnings are well underway with companies in the S&P 500 reporting a year-over-year decline of about -44% in earnings thus far (FactSet). However, this was in line with analyst estimates, and nearly 73% of the companies that have reported so far have managed to beat expectations. On the economic front, existing home sales rose by 20.7% in June, slightly below consensus expectations. Going forward, we can expect elevated volatility as investors digest a plethora of economic data and earnings in the coming week. Next week, investors will get their first glimpse of second-quarter gross domestic product (GDP), as well as personal income, consumer spending, and consumer confidence, among others. The Federal Reserve will conclude its two-day meeting on Wednesday where they will announce any changes to interest rates (expectations are for no change) as well as their expectations for the future path of monetary policy. Yields moved slightly lower this week, with the yield on the 2-year and 10-year Treasury notes trading around 0.14% and 0.59% respectively mid-week.

Source: Morningstar, CNBC, Bloomberg, GSAM, FactSet