Weekly Economic Update provided by Capstone Investment Financial Group
THE WEEK ON WALL STREET
Overcoming a COVID-related economic growth scare, stocks moved higher amid a week of strong corporate earnings reports.
The Dow Jones Industrial Average rose 1.08%, while the Standard & Poor’s 500 gained 1.96%. The Nasdaq Composite index soared 2.84% for the week. The MSCI EAFE index, which tracks developed overseas stock markets,
dipped 0.20%.1,2,3
DELTA VARIANT HEAD FAKE
Stocks staged a broad retreat on Monday as traders worried about the adverse economic implications of growing Delta variant infections. Economically sensitive sectors, such as energy, financials, industrials, and
materials, absorbed the brunt of Monday’s sell-off.
But the markets did a quick about face, posting four-consecutive days of gains and leaving the three major averages with fresh record highs.4
The sharp reversal may be attributable to a “buy on the dip” investor mentality, the absence of investment alternatives to stocks in this low interest rate environment, and massive financial liquidity. Stocks were also
lifted by a healthy kick-off to the second quarter earnings season.
