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Hope all is well. A bunch of corporate earnings reports, economic data, and a Fed meeting made this the busiest week in quite some time. There was a lot of push and pull, with stocks finishing slightly lower to where they started the week, but still near all-time highs. With the Olympics in full swing, I have broken down this week’s news using Olympic events.



Getting the economy back to its pre-pandemic peak turned out to be more of a marathon than a sprint.  U.S. economic activity finally reclaimed its pre-pandemic peak and accelerated from the first quarter.   The acceleration was at a slower pace than expected as real GDP grew at a 6.5% annualized rate versus a forecasted 8.4% forecast. Shortages are holding back the recovery, but the economy is bigger now than it was before the pandemic.


Diving deeper into the GDP number showed consumer spending, which represents a 70% share of overall demand, was stronger than expected, growing at 11.8%. The reopening of the economy, aided by vaccinations, and pent-up demand is leading to higher spending. Growth would have likely been even stronger if it weren’t for the supply bottlenecks and shortages.

High Jump

Corporate earnings continue to rise, but the bar of expectations is high after a sharp rally in prices since the middle of May. Earnings are topping estimates at record levels (87% of the S&P 500 companies have exceeded estimates by an average of 18%). The mega-cap tech companies reported solid earnings and yet share prices, excluding Google, declined. Amazon, Apple, Google, Microsoft and Facebook, which together make up 22.5% of the S&P 500, on average doubled their earnings from last year. Some of the pandemic stay at home trends are reversing, but the digital transformation continues. Online advertising spending, cloud computing and smartphone demand are rising which should continue to propel the big tech companies to new heights.

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