Dow Jones emerged as the leader in weekly gains, with an impressive winning streak of 10 consecutive sessions, thanks to positive quarterly results from several high-profile defensive stocks. The industrial average recorded a 2.1% increase for the week, marking its longest winning streak since 2017.
However, the tech sector didn’t have the same success story to tell. The Nasdaq Composite felt the impact of disappointing results from companies like Netflix and Tesla, leading to a 0.42% decline for the week.
Tesla, in particular, witnessed a significant sell-off, causing CEO Elon Musk to lose nearly $20 billion in a single day. The carmaker’s stock plummeted by almost 10% on Thursday, resulting in a loss of over $90 billion in market value. Despite reporting successful quarterly results that surpassed analyst expectations and achieving an all-time high quarterly revenue figure, Musk’s focus points during the conference call, including possible price cuts and the absence of specific details on key future developments, left investors concerned.
Netflix, on the other hand, posted better-than-expected earnings per share but fell short of revenue estimates. The company’s recent crackdown on account sharing received praise from analysts, leading to the opening of almost 6 million new accounts on the platform. Despite the sell-off, most analysts raised their price targets for Netflix.
In terms of retail sales, the U.S. experienced continued growth in June, albeit at a slower pace than before. Retail sales rose by 0.2% compared to May, indicating healthy spending power across the country.
The resilience of major banks in a volatile macroeconomic environment boosted market sentiment. Bank of America’s shares climbed 8.2% for the week, surpassing analysts’ consensus estimates with revenues reaching $25.2 billion. Similarly, Morgan Stanley and Charles Schwab beat estimates, with their shares rising by 9.8% and 13.5% respectively.
In other news, Apple saw an increase in its shares after it was revealed that the company is working on its own AI engine, potentially competing with OpenAI’s ChatGPT and Google’s Bard. ExxonMobil surprised investors with its plans to mine lithium in Arkansas, marking a strategic move towards diversification into the electric vehicle industry.
However, climate instability continued to impact corporate America, with a Pfizer production plant in North Carolina suffering heavy damage from a tornado.
Additionally, a hurdle was cleared in Microsoft’s $69 billion merger with gaming giant Activision Blizzard as the Federal Trade Commission agreed to pause an antitrust lawsuit, potentially paving the way for the biggest-ever deal in the gaming industry.
The week also saw a highly anticipated decision from the Federal Open Market Committee regarding interest rates. The committee had to decide whether to raise rates or maintain the pause that was implemented after their June meeting. Positive inflation data from the previous week was expected to influence the decision, which could potentially result in the federal funds rate reaching its highest level in 22 years.
Overall, the week had its winners and losers, with the Dow Jones leading the gains while the tech sector faced some setbacks. The market remained influenced by a range of factors, from company earnings to climate instability and regulatory decisions.
