U.S. Stocks and High-Yield Bonds gained modestly last week. Short-Term Treasuries and Investment Grade Bonds slightly declined.
The S&P 500 finished the week up half of a percent to 2,182. Gaining five out of the last six weeks, the index reached another new all-time high. All-time highs occur frequently; the S&P 500 has accomplished this feat on 7% of all trading days going back to 1950. Financial, Healthcare, and Technology stocks had a strong week, while Utilities and Energy equities underperformed. A rally in stocks occurred on Friday after a stronger-than-expected jobs report. Nonfarm payrolls surged to 255,000 in July, above the consensus 185,000.
Many companies reported their quarterly results throughout the week. The blended (estimated and already reported) earnings decline now stands at -3.5% year-over-year, an improvement from a -6.7% decline in Q1. For Q3, the estimated decline in earnings stands at -1.7%, further positive progress. In terms of S&P 500 sectors, Consumer Discretionary is posting the strongest earnings this quarter, with an increase of 10%, while Energy is showing the worst declines, down 72%. Retail sales data will be important to watch for next week to determine the strength of the U.S. consumer.