Despite a second consecutive day of better-than-expected inflation data, market indexes failed to sustain their bullish sentiment through Thursday’s close and ended the session broadly flat. The Dow gained a meager +0.08% while the S&P 500 countered -0.07%; the strongest indices of recent sessions — the tech-heavy Nasdaq and the small-cap Russell 2000 — closed down -0.58% and +0.18%, respectively.
The producer price index (IPC) numbers continued this morning with the narrative that the consumer price index (CPI) started yesterday, following a downward slope in inflation metrics from June to july We are still at historically high price levels across the board, which may have given market participants pause today lest they get too far ahead of expectations. That said, both the Nasdaq and the S&P are poised for their fourth consecutive week of trading.
All the major indexes are up over the past five trading days and the past month, which has provided the strongest buying we’ve seen all year. The Dow is currently down single digits year to date (-8.9%), the S&P is -12.3% over that time period and the Nasdaq, now finally out of its bear market trading range for the first time in three months. — is -19.3% compared to the first of the year. The Russell has outperformed the five-day and one-month timeframes (+3.85% and +14.5%, respectively) and is now trading -13.1% YTD.
After Thursday’s close, a new electric vehicle maker Rivian (RIVN Quick PriceRIVN – free report) reported better-than-expected second-quarter results on both the top and bottom lines: -$1.62 per share reported was 5 cents better than the Zacks Consensus, while $337 million in quarterly sales were significantly higher than the $337.7 million expected by analysts. Guidance for a bigger revenue loss of -$700 million for the fiscal year initially sent shares down -5% in the afternoon, but Rivian is now back +3.7% in the aftermarket.
The reason for this is likely the still strong guidance in vehicle production: the company reiterated for 25,000 electric vehicles by the end of 2022. The company pointed to supply chain constraints during the first half of year, while reporting 8,000 vehicles from June. 30, 4467 deliveries in the second quarter alone. That suggests productivity is on the rise for the Irvine, CA-based manufacturer. Rivian also reported 98,000 pre-orders for Q3 and expects to launch its latest model, the R2, in 2025.
Consider the good news on the inflation front mostly priced in today’s market. We still have a couple more weeks of earnings reports to draw conclusions about the second quarter and an outlook towards the end of the year. Next week brings us new housing and production/capitalization data, but not before the import price index and the University of Michigan consumer sentiment survey tomorrow. After all these data, while none speak as loudly as last week’s CCPI and Jobs Report, it will be key to spot market appetite to keep this mini-rally alive.
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