Your Weekly Blip 7/27/21

Your Weekly Blip 7/27/21

The Markets,
Last week the markets fell hard on Monday but then recovered and closed the week out with a record high. What gives? The quick 725 point selloff was the result of investors getting out after reports of a possible stall in the economic recovery as covid cases increase. What happened next was a flood of money coming off the sidelines sending markets back to record highs. Gurus know that during last year’s shutdown the US savings rate shot up to 30% at one point and as a result Americans are flush with cash and waiting for a pullback in the market so they can go long. Monday proved to be one of those pullbacks and sideline cash was put to work in a classic “buy the dip” move by investors.
After hitting an all-time high on Friday the markets followed through on Monday with a tidy gain on 82 points to 35,144 on slightly less trading volume.
The Economy and Earnings
This week will be big for earnings as Google, Amazon, Apple and Microsoft all report their Q2 numbers. This could lead to some choppiness in the markets since sell side gurus are expecting growth at these firms to slow down.
Tesla reported earnings yesterday after the closing bell and the results marked the eighth straight quarter of profits and the first quarter of GAAP net income. Musk and company produced 206,304 vehicles which was a 121% increase for last year and on the financial side they finished with $16 billion in cash. Tesla stuck to its forward guidance which called for 50% average annual growth including continued margin expansion.
Items of Interest
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