Buoyed by recent earning reports issued by major corporations, the S&P etched up towards a new record level on Monday, August 9, 2021, before settling right below the high on news from the oil industry.
The S&P set a record high on August 3, 2021. Yet, some traders remain jittery because of the Delta variant of the Coronavirus sweeping across China. While only 143 cases have been reported in the country, the Chinese government has cracked down with mandatory lockdowns of some residential neighborhoods and the cancellation of public events. These steps may slow the country’s economic recovery and reverberate through the stock markets.
Companies Reports Strongest Profit Estimates Ever
On August 6, 2021, the Institutional Brokers’ Estimate System announced that they expected second-quarter profit growth of 93.1% for S&P 500 companies. Of the 500 companies on the S&P, 87.4% had already reported beating second-quarter profit estimates by the experts. That is the highest number ever recorded since the S&P was formed in 1860.
Awaiting Central Bank Announcement
Art Hogan, the chief market strategist at National Securities in New York, says that near-record highs will continue to be set, or the record may be broken before the Federal Bank announces what they intend to do about interest rates.
On Monday, Atlanta Fed President Raphael Bostic said that he supports the central bank not raising interest rates until the pandemic is well over. Richmond Fed President Tom Barkin says that he believes the central bank should raise rates because of the inflation rate during the 1st and 2nd quarters. The central bank will meet in Jackson Hole, Wyoming, later in the month.