S&P 500 Claws Back Some Early Week Losses As Q2 Earnings Season Kicks Off

Zinger Key Points
  • Investors will see quarterly reports next week from Tesla, Netflix and others.
  • Analysts are expecting 10.1% revenue growth from S&P 500 companies in the second quarter, according to FactSet.

The SPDR S&P 500 ETF Trust SPY recovered nearly all of its early week losses on Thursday and Friday as investors digested more troubling inflation data and the first batch of second-quarter earnings reports.

On Wednesday, the U.S. Labor Department reported the consumer price index increased by 9.1% in June, the largest inflation reading since November 1981. The bond market is now pricing in a more than 40% chance the Federal Reserve will raise interest rates by 1% at its July meeting.

Related Link: The Market Is Now Pricing In a 1% July Interest Rate Hike Following Red-Hot CPI Inflation Reading

On Tuesday, Twitter Inc TWTR filed a lawsuit against Tesla Inc TSLA CEO Elon Musk in an effort to force Musk to complete his $44-billion takeover agreement for the social media platform. Musk offered to buy Twitter at a price of $54.20 back in April but backed out of the deal on July 8, claiming Twitter failed to provide accurate information related to its number of spam accounts.

On Monday, the euro reached price parity with the U.S. dollar for the first time in 20 years. The value of the euro has fallen in 2022 on concerns an energy crisis could trigger a eurozone recession.

Related Link: Euro And US Dollar Reach Parity: What It Means For Bitcoin And Other Cryptos

Shares of image sharing social media platform Pinterest Inc PINS climbed 13% on Friday following a report by the Wall Street Journal that activist investor Elliott Management has built a more than 9% stake in the company. Prior to Friday's gain, Pinterest shares were down 75% in the last year, as the company has struggled with declining monthly active users.

Don't Bank On It: JPMorgan Chase & Co JPM shares traded higher on Friday despite the bank reporting a 28% drop in earnings in the second quarter and suspending its buyback program.

Investors will get more quarterly earnings reports next week from Bank of America Corp BAC on Monday, Netflix Inc NFLX on Tuesday, Tesla Inc TSLA on Wednesday, AT&T Inc. T on Thursday and Verizon Communications Inc. VZ on Friday.

Analysts are expecting 10.1% revenue growth from S&P 500 companies in the second quarter, according to FactSet.

Economic Numbers: In the week ahead, investors will get key economic updates on Tuesday when the U.S. Census Bureau releases its June Housing Starts report and on Wednesday when the European Central Bank releases its latest interest rate decision and accompanying commentary.

Photo via Shutterstock.

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