Buy the Dip | Daily Market Update

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Friday, July 23, 2021

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Buy the dip

Even after Monday’s big drop for stocks in the U.S., stocks have roared back and are now looking at a nice gain for the week. Here are some of the reasons for the bounce.

  • The S&P 500 Index’s 50-day moving average once again held as support, much like it has all year on pullbacks.
  • Corporate America is again reporting very solid earnings, as Q2 earnings now have a chance at being up 80% year-over-year.
  • Buybacks are in full swing, as the media has been reporting lately. This is yet another potential support for stocks.
  • Lastly, bipartisan support for the infrastructure bill appears to be moving forward.

Daily Insights

US equities opened in the green, as markets are within reach of new record highs

  • After a rocky start Monday, US markets have enjoyed three consecutive higher closes and could finish positive for the week.
  • Natural gas prices hit a 31-month high as summer heat drove electricity demand.
  • European equities are higher through midday trading as Eurozone business increased this month to a 21-year high.
  • Asian markets finish mostly lower with Hong Kong (Hang Seng) reversing much of Thursday’s gains to finish almost 1.5% lower Friday.

LEI continues to forecast growth:

  • The Conference Board released its Leading Economic Index (LEI) report for June on Thursday, showing the series rose 0.7% month over month.
  • This represents a slight slowdown from the torrid pace of the previous three months, but remains elevated by historical standards and continues to signal strong future growth.
  • We examine the data release, as well as its implications for future economic growth, in further detail on the LPL Research Blog.

Technical update

  • The S&P 500 Index is looking for its fourth gain in a row today, following Monday’s sell-off.
  • While Tuesday and Wednesday saw strong breadth, yesterday’s dynamic looked similar to many over the past month with small caps falling and decliners outnumbering advancers by more than 3:1 on the NYSE.
  • In the near-term, we are closely watching Treasury yields, which reversed sharply off support at 1.2%, to see if they can continue recent upward momentum. First key level to the upside is 1.4%.

LPL Research in the Media

LPL Financial Chief Market Strategist Ryan Detrick is scheduled to appear on Fox Business sometime between 2:00-3:00 p.m. ET today.

Midyear Outlook 2021: Picking Up Speed

LPL Research provides an overview of their forecasts on the economy, policy, stocks, and bonds for the rest of 2021 and beyond. Learn more in this week’s Weekly Market Commentary.

Mr. Powell Goes To Washington | LPL Market Signals

In this week’s LPL Market Signals podcast, LPL Research’s Chief Market Strategist, Ryan Detrick and Equity Strategist, Jeff Buchbinder discuss the start of earnings season, policy, and more.

Publication Update

Effective today, Friday, July 23, 2021, LPL Research is discontinuing publication of the Daily Market Update on lplresearch.com. This edition is our final release. Our daily blog release schedule remains unaltered at this time.

 

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