Weekly Market Update | July 19, 2021
The Week on Wall Street
Despite a good start to earnings season and some solid economic data, worries of slower second-half economic growth led to a pullback in stock prices last week.
The Dow Jones Industrial Average fell 0.52%, while the Standard & Poor’s 500 lost 0.97%. The Nasdaq Composite index sank 1.87% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, was flat (-0.06%).
Stocks weakened amid an active week of news, including two important inflation reports, Congressional testimony from Fed Chair Jerome Powell, a string of economic reports, and the start of the second-quarter earnings season.
The earnings season began on a strong note as 95% of the first S&P 500 constituent companies to report checked in with “earnings above estimates” by an average of 22%. Despite these above-expectation earnings, stocks moved little on the results.
Bond yields continued to trend lower amid Powell’s testimony that monetary policy would remain unchanged. A decline in consumer sentiment fed worries of economic slowdown, leading stock lower and cementing losses for the week.
The Consumer Price Index (CPI) jumped 5.4% in June, representing the biggest monthly gain since August 2008. The core CPI, which excludes food and energy, increased 4.5%, which was the fastest pace since September 1991.
The CPI report was followed by the Producer Price Index, which surged 7.3% from a year earlier, outpacing May’s jump of 6.6%. Higher wholesale prices were primarily attributed to increased commodity prices and labor costs.
Fed Chair Powell, in Congressional testimony subsequent to these reports, reiterated his position that the accelerated inflation of recent months will be temporary.
Key Economic Data
Tuesday: Housing Starts.
Thursday: Jobless Claims. Existing Home Sales. Index of Leading Economic Indicators.
Friday: Purchasing Managers Index (PMI) Composite Flash.
Companies Reporting Earnings
Monday: International Business Machines (IBM), J.B. Hunt Transport Services, Inc. (JBHT), Prologis, Inc. (PLD).
Tuesday: Netflix (NFLX), HCA Healthcare (HCA), Chipotle Mexican Grill, Inc. (CMG).
Wednesday: Verizon (VZ), Johnson & Johnson (JNJ), The Coca-Cola Company (KO), United Airlines (UAL), Texas Instruments, Inc. (TXN), CSX Corporation (CSX), Novartis, AG (NVS).
Thursday: AT&T (T), Intel Corporation (INTC), Twitter, Inc. (TWTR), Snap, Inc. (SNAP), Abbott Laboratories (ABT), American Airlines (AAL), Southwest Airlines (LUV), Union Pacific (UNP), FreeportMcMoran (FCX), D.R. Horton, Inc. (DHI).
Friday: American Express (AXP), Honeywell International (HON), NextEra Energy (NEE), KimberlyClark Corporation (KMB).
Sources: The Wall Street Journal, July 16, 2021; Treasury.gov, July 16, 2021
Weekly performance for the Dow Jones Industrial Average, Standard & Poor’s 500 index, and NASDAQ Composite is measured from the close of trading Friday, July 9, to Friday, July 16 close. Weekly performance for the MSCI-EAFE is measured from Friday July 9, open to the Thursday July 5, close. Weekly and year-to-date 10-year Treasury note yields are expressed in basis points.
Healthy Summer Tips
Staying healthy this summer will help you enjoy the season even more. Here are some of our favorite healthy summer tips:
Stay safe in the sun and always wear sunscreen. Use an SPF 30 or above with both UVA and UVB protection. If possible, hang out in shaded areas.
Challenge your family and friends to some healthy competition, like a game of capture the flag, a scavenger hunt, volleyball, flag football, or dodgeball.
Eat smart by indulging in a few of your favorite foods, but still making healthy choices. Swap red meat out for chicken, choose fruits and veggies instead of chips and eat sweets sparingly. There are countless healthy barbecue and cookout recipes that are delicious and will still satisfy that summer picnic spirit.
Summer can be a great time to stay active by swimming or playing games and to enjoy some of your favorite healthy bites.
Tip adapted from Prevent Cancer Foundation
Fresh Herb Soup with Orzo
- 2 tablespoons extra-virgin olive oil
- 1 medium yellow onion, finely chopped (about 2 cups)
- ½ teaspoon salt
- ½ teaspoon black pepper
- ½ cup dry white wine
- 1½ cup uncooked orzo
- 3 tablespoons finely chopped fresh flat-leaf parsley stems
- 1½ cup finely chopped parsley
- 2 cloves garlic, minced
- 1 teaspoon crushed red pepper flakes
- 8 cups low-sodium vegetable stock
- 1 15-ounce can cannellini or white beans, drained and rinsed
- ½ cup finely chopped fresh chives
- ¼ cup finely chopped fresh tarragon
- 2 tablespoons finely grated pecorino Romano cheese, for garnish
- Heat the oil in a medium Dutch oven or soup pot over medium heat.
- Add the onion, salt and black pepper and cook, stirring occasionally, until softened, about 8 to 10 minutes. Add the wine and cook, stirring occasionally, until the liquid has almost completely reduced, 4 to 5 minutes.
- Add the parsley stems, garlic and crushed red pepper and cook, stirring constantly, until fragrant, 2 to 4 minutes. Add the broth and bring it to a boil over medium-high heat then reduce to medium-low and cook the orzo, stirring occasionally, 8 to 10 minutes until it’s softened.
- Reduce the heat to low and stir in the cannellini beans, cooking until they’re heated through, about 2 minutes. Remove the soup from heat.
- Stir in the chives, tarragon and parsley leaves. Add any additional salt or pepper as needed per your taste and, if you’re not following a vegan diet, garnish with pecorino Romano and serving hot.
Recipe adapted from foodandnutirtion.org/
When Should I Replace My Golf Grips?
How Do They Fit?
You should know if your grips are improperly fit almost immediately. Hit the driving range and test out your different grips in a variety of scenarios. How does your interlocking grip feel during a drive? What about while chipping? If you’re unable to treat your clubs as though you’re handling a delicate bird, chances are you need to get your grips fit to your hands.
Do They Look Worn?
Wear and tear is just a part of the game. As friction happens between your hands, gloves, and grip, they will naturally wear down. However, to keep your game at its best, you should address this issue as soon as possible. Cracks and faded or bare spots are the most common signs of wear.
Are They Slippery?
Golf isn’t an easy game. So, wanting to throw your clubs every once in a while may be a familiar feeling. However, you don’t want your clubs slipping from your grip at the worst time possible. Your hands produce oils that can cause the breakdown of materials. So, check your grips before every season to make sure they are up to par.
Tip adapted from https://www.shipsticks.com/
Who Can Deduct Car Expenses on Their Tax Returns?
Wondering if you can deduct expenses such as gas, depreciation, and lease payments on your tax returns? If you are a business owner or self-employed individual, you may be able to. If you use your car for both business and personal purposes, the expenses may be split and the deductions will be based on a portion of the mileage used for business.
There are two ways to calculate the car expenses you may be able to deduct. The first method is to calculate and deduct the actual expenses, including depreciation, lease payments, gas and oil, tires, repairs and tune-ups, insurance, and registration fees.
The second is to use the standard mileage rate, which is a rate calculated to represent gas and some of the above factors. In 2021, the standard mileage rate is 56 cents per mile. Taxpayers who want to use the standard mileage rate for a car they own must choose to use this method in the first year the car is available for use in their business.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov
Photo of the Week
Sunset over Mt. Hood in the Hood River Valley, Oregon
Financial planning and investment advisory services offered through Cleveland Wealth, LLC, a Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified wealth advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.