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Top 5 Things That Moved Markets This Past Week

Investing.com – Top 5 things that rocked U.S. markets this week:

1. Amazon Jumps for the Week; Netflix Sees Earnings Jitters

Wall Street ended the week higher, with all the major indices closing in the green.

Tech stocks were winners for the week. The tech-heavy Nasdaq finished up more than 1% and the S&P Technology Index rose more than 2%.

Among the big winners in tech land was Amazon (NASDAQ:AMZN). The stock got a boost on a price target raise by Canaccord to $2,000 from $1,800 Thursday and again when S.G. Cowen raised its price target on the stock to $2,100 from $2,000 Friday.

In the rest of the FAANG stocks, Alphabet’s Google (NASDAQ:GOOGL), Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB) all closed up for the week.

But Netflix (NASDAQ:NFLX), which reports earnings after the bell Monday, ended in the red, hurt by Friday selloff. There are likely a few jitters about what numbers Netflix would have to report to spur more buying with the stock up around 100% year to date.

2. Inflation Data Lets Fed Stay Steady on Rates

Inflation data was paramount during the week, especially after last Friday’s employment report gave mixed signals of strong continued job creation but weaker-than-expected wage growth.

The numbers grabbing the headlines were the levels in wholesale and retail inflation not seen for a while.

The producer price index (PPI) was up 3.4% in June year over year, the highest level in 6-1/2 years. The June consumer price index (CPI) posted a year-over-year rise of 2.9%, the largest rise in six years.

But the stock market tends to focus more on the month-on-month numbers and those figures were mixed. CPI was in line with expectations month over month, while core CPI, which excludes volatile food and energy prices, was up less than expected. PPI and core PPI came in just a little hotter than expectations.

So, while prices are definitely rising, the economy is so far avoiding the spikes that would fuel fears over interest rates rising quickly.

More significant for those zoned in on the Fed’s rate-hike path than the inflation data was likely the shift of Chicago Fed President Charles Evans comments in a wide-ranging interview with The Wall Street Journal that the economy could handle a move to neutral rates. That was interpreted to mean he’d support two rate-hikes this year.

There is currently a more-than-80% of a rate hike in September and a more-than-55% chance of one in December, according to Investing.com’s Rate Monitor Tool.

3. Delta Results Steal the Spotlight From Banks

The bank earnings were supposed be the highlight of the week. But the mixed results from Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) failed to spur anything but a muted reaction from the market Friday.

Instead, Delta Air Lines (NYSE:DAL) likely offered the most insight for investors. Shares climbed Thursday after the carrier beat second-quarter profit expectations thanks to fair increases.

But it also highlighted a jump in fuel costs of nearly 40% in the quarter, a $2 billion increase.

That’s trouble for the airline sector as whole, which is already struggling in 2018. The Dow Transports are off about 0.6% year to date. But there could be more weakness ahead if fuel costs remain high and companies like FedEx (NYSE:FDX) and UPS (NYSE:UPS) are hit by trade battles.

4. Trade War Jitters Abate (Somewhat)

Until earnings arrived in earnest Friday, the summer, low-volume market has been especially susceptible to the vagaries of trade tensions.

The week started off with more saber rattling between the U.S. and its trade partners. The U.S. released a list on Tuesday of $200 billion more in Chinese goods that it would assess for tariffs of 10%. China again promised retaliation.

That same day, ahead of his trip to Europe, President Donald Trump tweeted that the U.S. loses $151 billion on trade with the EU and that the single bloc charges the U.S. big tariffs and enacts trade barriers.

But worries were assuaged on Thursday when Treasury Secretary Steve Mnuchin said there was a possibility that the U.S. and China could restart trade talks. And the president, while hammering allies of NATO spending, has not made any remarks about specific trade action against Europe.

The rosier outlook on trade was reflected in the performance of Boeing (NYSE:BA), which is particularly sensitive to trade battles given the amount of its overseas business.

Boeing was one of the best Dow performers for the week.

5. Oil Holds Above $70

Oil prices fell for the week, but energy stock bulls will be heartened by crude oil’s ability to stay above $70 mark on Friday.

Crude oil futures for August delivery settled at $71.01 per barrel, up 1% on the day.

Oil did dip below $70 in morning trading, rose steadily through the rest of the day, then sold off late. The latest Baker Hughes rig count showing no change added some support to prices.

For the week, mixed signals on supplies scaled back investor expectations for a global supply shortage as Libya resumed exports, U.S. supplies fell more than expected, while bets on a significant loss of Iranian crude were trimmed.

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