Dow Jones continues upwards but Mega caps stall - Creand
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Dow Jones continues upwards but Mega caps stall

The Dow Jones extended its winning streak to ten straight sessions highlighted by a sizable gain on Thursday, which was led by Johnson & Johnson (JNJ), IBM (IBM), and Travelers (TRV) following their earnings reports. Mega caps were relative underperformers due to profit-taking activity as well as steep losses from Tesla (TSLA) and Netflix (NFLX) following mixed earnings reports.  Taiwan Semiconductor Manufacturing Co. (TSM) was another laggard after warning about weaker than expected demand from their customers.

On the positive side, the bank stocks outperformed following better than expected earnings reports. Bank of America (BAC) kicked off the good news with its earnings report on Tuesday.  Northern Trust (NTRS), M&T Bank (MTB), Western Alliance (WAL), and U.S. Bancorp (USB) all logged nice gains after their earnings reports. The SPDR S&P Regional Banking ETF (KRE) jumped 7.5% this week while the SPDR S&P Bank ETF (KBE) rose 6.7%.

The S&P 500 health care sector (+3.5%), boosted by Johnson & Johnson (JNJ) and Abbott Labs (ABT), and energy sector (+3.5%) saw the biggest gains. The communication services sector, meanwhile, was the top laggard by a decent margin, falling 3.0%.

Next week we have a busy earnings reporting schedule that will feature results from Alphabet (GOOG) and Microsoft (MSFT) on Tuesday and Meta Platforms (META) on Wednesday.  Also, there will be policy meetings for the Fed, the ECB, and the Bank of Japan. The economic calendar, in turn, will feature a number of key releases highlighted by the Q2 GDP report and the core-PCE Price Index which is the Fed’s preferred inflation gauge

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Charles Castillo
Senior Portfolio Manager. Creand Wealth Management