S&P 500 Snaps 4-Week Winning Streak As Investors Anticipate Higher Interest Rates

Zinger Key Points
  • Second-quarter earnings season rolls on next week with Macy's, Nvidia, Peloton and more.
  • Excluding the energy sector, S&P 500 earnings are down 4% year-over-year in the second quarter, according to FactSet.

The SPDR S&P 500 ETF Trust SPY broke a four-week winning streak this week as the latest commentary from the Federal Reserve suggests investors can expect aggressive interest rate hikes to continue.

On Wednesday, the Fed released minutes from its policy-setting meeting in July that revealed the central bank is prepared to continue raising interest rates until inflation subsides substantially. The bond market is pricing in another rate hike of at least 0.5% in September.

On Thursday, GameStop Corp. GME Chairman Ryan Cohen's RC Ventures disclosed in a filing that it has unloaded its entire stake in so-called meme stock Bed Bath & Beyond Inc BBBY. Bed Bath & Beyond shares had skyrocketed more than 350% in the last month, but they dropped 40.5% on Friday following the news of Cohen's exit.

On Thursday, the National Association of Realtors reported existing U.S. home sales dropped 20.2% year-over-year in July. The national average mortgage rate on a 30-year fixed loan is around 5.5%, up from 3% at the beginning of the year.

Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B) filed its quarterly 13F form on Monday disclosing all the investment moves its legendary CEO Warren Buffett made in the second quarter. Buffett added to large stakes in Occidental Petroleum Corporation OXY, Chevron Corporation CVX and Apple, Inc. AAPL reduced his investments in General Motors Company GM and Kroger Co KR and exited a position in Verizon Communications Inc. VZ.

Fleet Of Foot: Shares of athletic footwear retailer Foot Locker, Inc. FL traded higher by 20% on Friday after the company reported a second-quarter earnings beat and announced a new CEO.

In the week ahead, second-quarter earnings season rolls on with reports from Macy's Inc M and Xpeng Inc - ADR XPEV on Tuesday, NVIDIA Corporation NVDA on Wednesday and Peloton Interactive Inc PTON on Thursday.

Excluding the energy sector, S&P 500 earnings are down 4% year-over-year in the second quarter, according to FactSet.

Economic Numbers: In the week ahead, investors will get key economic updates on Monday when the People's Bank of China announces its latest interest rate decision and on Friday when Federal Reserve Chair Jerome Powell delivers a speech at the Jackson Hole Symposium.

Photo via Shutterstock. 

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