Positive Earnings, Housing, and LEI News; Stocks Closed Week At A Record
Published Friday, July 23, 2021 at: 7:40 PM EDT
Positive reports on corporate earnings, housing starts, and the index of leading economic indicators (LEI) drove stocks to close the week at a record high.
American Express, Coca-Cola, and Twitter, all issued better than expected earnings reports, and two important economic indicators were very positive.
According to numerous academic studies, America needs to build about one million new single-family housing units to keep up with population growth but lagged from that level for five years, from 2008 until 2013. Since June 2020, housing starts have exceeded the one-million a year mark for a sustained period for the first time since 2007. Housing starts are important because they affect a broad range of services and products.
The Conference Board LEI for the U.S. increased by seven-tenths of 1% in June to 115.1, following a +1.2% increase in May and a +1.3% increase in April.
The LEI is comprised of 10 sub-indexes, making it an important indicator of what’s happening now in the economy. The LEI is higher than it was at the peak of the last economic expansion at the end of 2019. Keep in mind, the Delta variant is likely to dampen growth but the LEI is higher than it’s been over the past two decades – a very positive sign.
“June’s gain in the U.S. LEI was broad-based and, despite negative contributions from housing permits and average workweek, suggests that strong economic growth will continue in the near term,” said Ataman Ozyildirim, senior director of economic research at The Conference Board. “While month-over-month growth slowed somewhat in June, the LEI’s overall upward trend—which started with the end of the pandemic-induced recession in April 2020 — accelerated further in Q2. The Conference Board still forecasts year-over-year real GDP growth of +6.6% for 2021 and a healthy +3.8% for 2022.”
The Standard & Poor’s 500 stock index closed this Friday at an all-time high of 4,411.79. The index gained +1% from Thursday and +2% from a week ago. The S&P 500 is up +65.40% from the March 23, 2020, bear market low.
On Monday, the S&P 500 plunged 1.6% after bad numbers were released about Delta variant cases rising in states with low vaccination rates. The Delta variant and inflation remain the main known risks affecting stock prices. Despite the record highs, expect more volatility, up and down, as the nation works its way through this crisis.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
- A Financial And Tax Planning Strategy For This Week's Stock Market Plunge
- Having Trouble Tuning Out The Bad Financial Economic News?
- A Key Signal Of Strength At A Pivotal Moment In Economic History
- Despite Strong Jobs Report, Stocks Declined Last Week
- The Fed Risks A Recession To End Inflation, As Expected
- Stocks Snap Four-Week Win Streak
- Stocks Have Soared Lately, But What Should You Expect Near And Long-Term?
- Investing In An Economy Beset By Multiple Anomalies
- Despite Bad Economic News, Stocks Rose 4% In The Week Ended July 29, 2022
- Amid Bad Data Releases, Leading Economists Predict No Recession
- Good News: Real Retail Sales Dropped Fractionally In The Past Year
- Financial Economic News Analysis
- The Good News Is All This Bad News
- Four Signs A Recession Could Be Short And Shallow
- Odds Of A Soft Landing Shrunk After Friday's News
- Bad Inflation Surprise Sends Stocks Down Sharply
- It Could Be A Long, Hot Summer For Investors
- What A Difference A Week Makes
- Amid Stock Market Turmoil, +2.3% Growth Projected In 2022
- Staying On Track Amid The Ukraine And Inflation Crises
- For Investors, 2022 Is Turning Into A Test
- Is The Economy Brightening? Or Is The Federal Reserve Slamming The Door On Growth
- Financial Economic News In Perspective
- Stocks Closed Lower This Week On Inflation Fears