Thursday, August 4 2022

The S&P 500 recouped nearly all of its losses earlier in the week on Thursday and Friday as investors digested more worrisome inflation data and the first batch of second-quarter earnings reports.

On Wednesday, the US Department of Labor announced the consumer price index rose 9.1% in June, the highest inflation since November 1981. The bond market is now pricing in more than a 40% chance that the Federal Reserve will raise interest rates by 1% at its July meeting.

Tuesday, Twitter filed a lawsuit against Tesla CEO Elon Musk in an attempt to force Musk to complete his $44 billion takeover deal for the social media platform. Musk offered to buy Twitter for $54.20 in April, but backed out of the deal on July 8, saying Twitter failed to provide accurate information about its spam count.

On Monday, the euro reached price parity with the US dollar for the first time in 20 years. The value of the euro fell in 2022 on fears that an energy crisis could trigger a recession in the euro zone.

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Pinterest image sharing social media platform shares increased by 13% on Friday following a Wall Street Journal report that activist investor Elliott Management acquired a stake of more than 9% in the company. Prior to Friday’s gain, Pinterest shares were down 75% over the past year as the company struggled with a drop in monthly active users.

Don’t bet on it

Shares of JPMorgan Chase traded higher on Friday despite the bank announcing a 28% drop in second-quarter profits and suspending its buyback program.

Investors will receive more quarterly earnings reports from Bank of America on Monday, Netflix on Tuesday, Tesla on Wednesday, AT&T on Thursday and Verizon on Friday.

Analysts expect 10.1% revenue growth for S&P 500 companies in the second quarter, according to to FactSet.

Economic figures

In the week ahead, investors will receive key economic updates on Tuesday when the US Census Bureau releases its June housing starts report and on Wednesday when the European Central Bank releases its latest decision on interest rates and accompanying comments.

Benzinga is a financial information and data company headquartered in Detroit.

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