August is behind us, so let’s take a look at how stock indices on Wall Street performed during this period. The release of quarterly results is behind us, and according to FACTSET data, as many as 70% of companies in the S&P 500 index achieved a higher level of revenue than analysts expected, which is the highest level since the second quarter of 2011 (72%). The positive aspect is that the last quarter was marked by a double-digit earnings growth of 10.30%, which is the second consecutive quarter of earnings growing at rates above 10%, the last time this was recorded in the second and third quarters of 2011.
The main U.S. stock indices, the Dow Jones Industrial Average, S&P 500, NASDAQ Composite, and Russell 2000, mostly had positive performance in August, with DJIA at 0.45%, while S&P 500 remained almost unchanged with a slight decline of 0.05% compared to the previous month. The NASDAQ Composite technology sector index, with a return of 0.77%, did not differ significantly from the mentioned indices. The only index with a negative performance exceeding 1% was Russell 2000, with a decline of 1.63%. Since the beginning of the year, these stock indices have performed much better, with DJIA at 11.26%, S&P 500 at 10.62%, NASDAQ at 19.55%, and Russell 2000 at 4.16%.
In the precious metals market, there have been positive shifts, largely attributed to the weakening of the dollar and uncertainty on the Korean Peninsula. On a monthly basis, the price of gold increased by 3.84%, while the price growth since the beginning of the year is around 15%. On a monthly basis, silver recorded a higher return than gold with a price increase of 5%, while with a return of 10.72%, it recorded a weaker result than gold when considering the period since the beginning of the year.
The macroeconomic indicators released last week for the U.S. market are excellent. In the labor market, 237 thousand people were employed in August, significantly higher than the expected 185 thousand. The second estimate of GDP growth on a quarterly basis was increased from the expected 2.7% to 3%, which prompted the strengthening of the U.S. dollar in the currency market upon release. On Friday, data was also released regarding the unemployment rate, which slightly increased to 4.4% from 4.3%, which was the rate for the previous three months. Excellent macroeconomic indicators, as well as excellent business results from companies, could prompt the Fed to raise interest rates again by the end of the year. How this could reflect on the capital market and whether the U.S. dollar will continue its long-term strengthening trend remains to be seen.
