Read the highlights of this week’s commentary from Helios:
Q2 GDP shrank at a 0.9% annualized rate, the second decline in a row. Consumer spending slowed but continued to grow in the face of rising prices. Surging exports also helped though businesses have significantly curtailed investment amid the uncertain environment. In addition, weakness in real estate spending and a drop in inventories and government spending also weighed on GDP.
The Fed raised rates by 75 basis points, putting the target range at 2.25% to 2.50%. While expectations had bounced over the last few weeks, ranging from expecting a 100 basis point hike, immediately before the meeting, the market was placing its bets on the 75 basis point hike. The market reaction was interesting, with equity markets significantly rallying in the afternoon following the announcement and yields falling at the short-end of the yield curve.
Earning season is just over halfway done, and results are showing slower than average growth rates, but still resilient top-line growth. Just over 77% of S&P 500 companies grew sales, and 63% grew earnings. Overall growth has been a 13.8% revenue increase and 6.0% earnings increase. Versus analyst estimates, 60% of companies reported sales above estimates, and 74% reported earnings above estimates.
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