Market News 7/21

Markets

The Dow continued its impressive nine-day winning streak, but the sentiment was different for the two other indexes, which have a stronger connection to the tech industry. The reason for the shift in mood can be attributed to Netflix, as the company's shares experienced a significant decline following lower-than-expected Q2 revenue. This led investors to question whether this trend of lower sales would persist in the future.

Dow Logs 8th Straight Day of Gains as Bank Results Reassure Investors

On Wednesday, stocks continued their upward trend, resulting in an eighth consecutive day of gains for the Dow. The positive performance was fueled by favorable bank results and easing inflation on the global front, which contributed to sustaining the recent rally.

The Dow Jones Industrial Average achieved a 0.3% increase, adding 109.28 points to close at 35061.21. This marked its longest streak of gains since 2019. The S&P 500 index also rose by 0.2%, led by real-estate and utility shares, while the tech-oriented Nasdaq saw a more modest gain of less than 0.1%.

Several regional banks, including U.S. Bancorp, M&T Bank, and Citizens Financial Group, reported that deposits stabilized in the second quarter, alleviating concerns among investors about the potential ripple effect of bank failures. The improved stability eased worries about the economy and its impact on businesses and families seeking loans. As a result, U.S. Bancorp rose by 6.5%, M&T Bank gained 2.5%, and Citizens Financial Group saw a rise of 6.4%.

Despite posting a significant drop in quarterly profit due to its exit from Main Street banking, Goldman Sachs' shares still gained 1%. Investors found encouragement in the firm's growing investment-banking backlog.

The financial sector's calmer backdrop and declining inflation in the United States and internationally have contributed to the solid gains of major indexes in the third quarter. This extension of the first-half rally has defied the pessimistic outlook that some investors had at the beginning of the year. Most traders are anticipating a quarter-percentage-point interest-rate hike from the Federal Reserve in the coming week, but fewer are betting on additional increases thereafter. This shift is considered beneficial to stocks, especially after last year's move towards higher interest rates and bond yields.

Tech

Threads Is Already Losing Its Allure for Users, Adding Urgency for New Features

Following an initial surge in sign-ups, user engagement on Threads, Meta Platforms' microblogging app, has been steadily declining, putting pressure on the parent company to introduce new features to revive interest.

According to market intelligence firm Sensor Tower, the number of daily active users on Threads has fallen for the second consecutive week, reaching 13 million, which is approximately 70% lower than the peak it reached on July 7. Additionally, the average time users spend on the iOS and Android apps has dwindled from 19 minutes to just four minutes.

For Android users in the U.S., the average time spent on Threads dropped to five minutes from a high of 21 minutes on the day of its launch, as reported by SimilarWeb, a digital data and analytics company.

In contrast, Twitter's daily active users have remained stable at around 200 million, with an average time spent of 30 minutes per day, according to Sensor Tower estimates.

Meta executives anticipated a decline in user numbers after Threads gained over 100 million sign-ups within a week of its launch earlier in the month. They do not view the current drop in engagement as a cause for concern and have reassured the public that they are actively working on introducing additional features. Meta's primary goal is to increase the user base and enhance the overall experience before focusing on monetizing the platform.

Politics

Judge Sets May 2024 Trial Date for Trump’s Documents Case

A federal judge in Florida, Judge Aileen Cannon, who was appointed by former President Donald Trump, has decided to postpone the prospective date of Trump's criminal trial related to his handling of classified documents after leaving office. The trial will now take place in May 2024, effectively extending the proceedings well into the 2024 election cycle.

While rejecting Trump's attempts to delay the trial until after the 2024 presidential campaign, Judge Cannon also disagreed with the Justice Department's request to schedule it for December, stating that such an accelerated timeline could compromise a fair trial. Ultimately, she set the trial to commence on May 20, 2024, in Fort Pierce, Florida, where she presides. Her decision was based on the belief that the interests of justice in allowing sufficient time for preparation outweighed the need for a speedy trial for both the public and the defendants.

Last month, Trump pleaded not guilty to charges alleging that he unlawfully retained and shared classified national-defense documents after his tenure in the White House, including during his time at Mar-a-Lago resort in Florida. His legal team argued that a fair trial would only be possible after the election, and that preparing for the trial during the campaign would be challenging.

Prosecutors countered these claims, stating that a December 11 trial date would allow ample time for preparation. They also asserted that the case did not involve new or complex legal questions and that they promptly provided Trump's defense team with all relevant evidence.

Sports

Tour De France

Jonas Vingegaard's days working in a Danish fish-packing plant didn't hint at his future as a leader of a Tour de France-winning team. When he transitioned to becoming a full-time professional cyclist with the Dutch team Jumbo-Visma, he appeared unassuming and reserved, lacking the typical characteristics of a yellow jersey contender.

Despite his unassuming nature, Vingegaard displayed impressive physical attributes, with strong lungs, powerful legs, and a lightweight body that excelled in mountain climbs. His demeanor was quiet and unassuming, much like how he approached his work packing boxes of herring for auction. These qualities made him an ideal teammate capable of grinding away in the background.

Now, five years after leaving the fish-packing plant, the 26-year-old Vingegaard is on the verge of becoming a two-time Tour de France champion. Not only is he leading Jumbo-Visma in this race, but he has also proven to be their most lethal asset.

Despite his low-key racing style, Vingegaard's true capabilities haven't gone unnoticed. As Christian Vande Velde, a former American pro and current NBC analyst, puts it, "It gets lost to the general public how much of a killer he truly is. He’s not a flamboyant racer. But it doesn’t mean he isn’t a Boy Scout with a machete behind his back."

Throughout the race, Vingegaard patiently waited for the right moment to make his move. He maintained a narrow lead over his main rival, Tadej Pogacar of Slovenia, until a stunning performance in the time trial on Tuesday widened the gap significantly. Then, on Wednesday, Vingegaard and his Jumbo-Visma teammates set an intense pace on the Col de la Loze in the Alps, solidifying his lead as Pogacar struggled and fell to second place overall, trailing by 7 minutes and 35 seconds.

Barring any unforeseen mishaps in the final competitive stages on Friday and Saturday, Vingegaard is set to don the coveted yellow jersey as the leader when he arrives at the Champs-Elysées in Paris on Sunday.