Wall Street traders reacted positively to corporate results despite previous economic worries. The S&P 500 remained near 6,300, with significant gains from Apple Inc. driven by its new $100 billion investment announcement. Advanced Micro Devices Inc. forecasted strong sales yet saw shares drop due to uncertainties in the China market. Earnings for S&P 500 companies exceeded second-quarter expectations significantly. Despite potential pullbacks from macroeconomic factors, they are predicted to create buying opportunities. Additionally, a Federal Reserve official indicated that a rate cut may be considered as the economy slows.
Earnings for S&P 500 companies are crushing second-quarter expectations up 9.1%, triple the pre-season forecast and the strongest beat rate since 2021, according to data compiled by Bloomberg Intelligence.
While pullbacks are possible particularly due to macro-related influences and poor seasonality trends those pullbacks will likely prove to be buying opportunities.
A slowing of the US economy may make a rate cut appropriate in the near term, said Federal Reserve Bank of Minneapolis President Neel Kashkari.
The key point is that the market can't look far enough. This is why it will ignore the recession risk, Paolo Schiavone wrote.
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