July 26, 2021
Good morning,
After dropping -1.6% (S&P 500) last Monday on a growth scare (delta variant), buyers rushed in for the rest of the week and pushed the index up to another new all time high, leaving it up +2% on the week. Worth noting, international equities as measured by the All Country World Index (non-US) only did half as well last week – an unusual performance gap. Vaccination rates are geographically imbalanced which may lead to uneven global economic growth drag from the delta variant.
Following that theme, international equities have had a difficult start of the week today. Overnight Futures (S&P kind) dropped almost a full percentage point at their lowest overnight levels. However, as the sun moved toward our shores this morning, losses have been largely mended – Futures are off 25bps, 30 min away from the open.
The week ahead is full with Tesla, Alphabet, Apple, Facebook and Amazon set to report. The Fed meets this week concluding Wednesday, and U.S. GDP data are due Thursday. I don’t know if we’ll have the same net gains at the end of this week that we had last week, but I am confident we’ll continue to see this glass half full / glass half empty dichotomy as it relates to economic growth. If the 2nd year of a bull market script holds, volatility is here to stay.
Be well,
Mike