US Stock Market Overview – Stocks Rally, but Finish the Week in the Red

 

US stocks moved higher on Friday, rebounding sharply, but the large cap S&P 500 index closed down nearly 1% for the week. Growing concerns over global growth put downward pressure on riskier assets. US yields were mixed, with the 2-year continuing to move south. This week the 30-year yield pushed through the 2% level closing at an all time low. Strong financial results from Nvidia helped buoy the semiconductor space, while US housing starts came in softer than expected. All sectors were higher on Friday, led by gains in financials and industrials. Utilities were the worst-performing sector in a robust tape. Crude oil prices edged higher but are down for the week. Gold prices eased slightly as the dollar traded sideways.

Nvidia Surges on Robust Financial Results

Nvidia stock surged following better than expected financial results. Earnings on the Semi giant rose $1.24 per share, versus $1.15 per share as expected by analysts. Revenue came in at $2.58 billion versus expectations that it would come in at $2.54 billion. Nvidia’s revenue fell 17% on an annualized basis in the quarter. Nvidia’s biggest segment, gaming, produced $1.31 billion in revenue, down 27% on an annualized basis and just above the $1.30 billion consensus estimate. The company’s data center segment came in with $655 million in revenue.

Housing Starts Fall

US Housing Starts fell for a third straight month in July amid a steep decline in the construction of multi-family housing units, but a jump in permits to a seven-month high offered hope for the struggling housing market. Housing starts dropped 4.0% to an annual rate of 1.191 million units last month, according to the Commerce Department. Data for June was revised down to show homebuilding falling to a pace of 1.241 million units, instead of dropping to a rate of 1.253 million units as previously reported. Expectations were for housing starts to rise to 1.257 million units in July. The 30-year fixed mortgage rate has dropped to 3.60% from a peak of 4.94% in November.

Trump Hears from CEO’s but Not What He Wants to Hear

President Donald Trump held a conference call with the CEOs of the three biggest U.S. banks as the stock market tanked earlier in the week. Trump held the call with J.P. Morgan Chase CEO Jamie Dimon, Bank of America’s Brian Moynihan and Citigroup’s Michael Corbat. The president asked the three men to give him a read on the health of the U.S. consumer. The executives responded that the consumer is doing well, but that they could be doing even better if issues including the China-U.S. trade war were resolved. Unfortunately, its not what Trump wanted to hear. He wants to gather consensus to push the Fed to ease rates, and does not want to hear that he should work out a deal with China that does not include tariffs.