S&P 500 Posts 5th Straight Weekly Gain

On August 6, 2018, in S&P 500 futures news report, by Infinity Trading
S&P 500 Futures

S&P 500 Futures

August 6th, 2018

Wall Street’s bullish wave, which commenced in July, continues in the first week of August despite the presence of trade war concerns and geopolitical conflicts. The benchmark S&P 500 index — generally used by market participants as the barometer of the broad market movement — was up for fifth straight week.

Robust U.S. economy, strong labor market, solid consumer and business spending along with government’s deregulation policies is likely to pave the way for further upside. Massive tax cut and fiscal stimulus will act as catalysts. Consequently, investment in S&P 500 stocks, which provided significant return in the last one month with favorable Zacks Rank and have further upside potential, will be a prudent move.

The S&P 500 Riding on Bull Run

In the last five weeks, the S&P 500 gained 1.5%, 1.5%, 0.1%, 0.6% and 0.8%, respectively. This marks the broad-market index’s longest weekly winning streak so far this year. Year to date, the S&P 500 is up 6.2%.

This indicates that the U.S. stock markets momentum remained largely unhindered in spite of recent volatility, signaling a recovery for Wall Street in the second half of 2018.

U.S. GDP for Second Quarter Soars

U.S. GDP grew at 4.1% in the second-quarter of 2018, marking its highest gain since the third quarter of 2014 and the third-best growth rate since the Great Recession of 2008-2009.

In the second-quarter, consumer spending increased 4%, business investment grew 7.3% and government spending rose 3.5%. Notably, first-quarter 2018 GDP growth rate was revised to 2.2% from 2% reported earlier.

Strong Labor Market

On Aug 3, the Labor Department reported that the U.S. non-firm job addition increased by 157,000 for the month of July. Moreover, data for May and June were revised upwards to add 59,000 more jobs in the economy.

Unemployment rate in July fell 0.1% from June to 3.9%, its lowest level in nearly 50 years. Average hourly earnings increased by 0.3% to 2.7% over the same period a year ago, reducing investor’s fear of a hyper-inflation.

Robust Earnings Momentum

U.S. corporates have so far posted robust results for second-quarter 2018, maintaining the terrific earnings momentum which has begun since the first-quarter 2018.

Notably, in the second-quarter, total earnings of S&P 500 companies are expected to be up 23.9% from the same period last year on 9.3% higher revenues. (Read More: Should We Worry About the Downtrend in Earnings Estimates?)

- Zacks.