Julex Weekly Market Review – July 14, 2023

The week saw market rallies, as the Dow rose over 800 points, or 2.4%, in the best performance since March.  The S&P 500 rose 2.5%, and the Nasdaq rose 3.3%.  

The rises were in part due to optimism regarding inflation and an end to rate hikes, as well as strong earnings reports from companies such as UnitedHealth and JPMorgan Chase.  

US Inflation Slows 

The Consumer Price Index (CPI) rose 0.2% in June, encouraging investors about a possible incoming end to rate hikes, and the possibility of avoiding a recession.  Despite this, the Federal Reserve will still likely raise interest rates in July.  

UN Reports Global Public Debt Reaches $92 trillion 

The record figure disproportionately affects developing countries, who hold 30% of the debt.  The report states it as a crisis, in which 3.3 billion people suffer due to their nation’s inability to provide “essential investments” because of crippling debt.  

Exxon Plans to Buy Denbury 

The deal is at a valuation of $4.9 billion, granting the largest US oil producer significant access to carbon dioxide pipelines and an established operation.  The company is investing in carbon capture and sequestration, while also working to reduce carbon dioxide emissions and thus receive US tax credits.  

Biden Administration Announces Forgiveness of $39 billion in Student Loan Debt 

The plan affects 804,000 people, who have met the criteria of making payments for 20 or 25 years, depending on a variety of factors.  The move comes after the Supreme Court blocked another plan by the administration that would have relieved about 37 million people of their debt.  Since the earlier attempt to cancel student loans was ruled as unconstitutional by the Supreme Court, it is likely the new plan will face legal challenges.

Bank Earnings Reports 

JPMorgan Chase reported stronger-than-expected earnings in the second quarter of 2023, helped by increased interest rates.  The bank reported $42.4 billion in revenue, and $4.37 earnings per share excluding the May acquisition of First Republic.  The bank’s stock rose .60% on Friday.  Wells Fargo also exceeded estimates, reporting $1.25 earnings per share.  

UnitedHealth Stock Rises from Earnings Report 

UnitedHealth reported $5.47 billion dollars in net income during quarter 2 of 2023, up almost 8% from the same period in 2022, in part causing the stock to rise over 7% on Friday.  The company has raised concerns however, about an influx of non-urgent procedures following the pandemic.  

What Will Happen Next Week

Earnings reports next week include Bank of America, Morgan Stanley, Lockheed Martin, Tesla, Netflix, IBM, Goldman Sachs, United Airlines, Johnson & Johnson, Capital One, and United Airlines among many others.  

The US Census Bureau will also provide figures regarding June retail sales, which are projected to have risen 0.5% from May.  Additional figures will also be released regarding the housing market.