- U.S existing homes sales soared in July, increasing 25% from the prior month
- The S&P 500 hit an all-time high last week, only 126 trading days after the start of the bear market on February 19th
- Target posted a 24% increase in comparable store sales versus the prior year in the three months ended July 31
Top Three Market Headlines
Housing Market Gains Momentum: Data released last week indicated that the U.S. housing market remains a bright spot for the U.S. economy as demand rises and mortgage rates remain at historic lows. U.S homebuilders began construction on new homes at a seasonally-adjusted annual rate of 1.5 million units in July, up 23% from both the previous month and a year ago. The rate of homebuilding is now down only 7% from pre-pandemic levels. Additionally, U.S. sales of existing homes rose 25% in July from the prior month, and pending home sales were up 19% over the same timeframe. July marked the second straight monthly increase in existing home sales after a dramatic drop in April and May.
S&P 500 Erases Bear Market Losses: The S&P 500 Index reached a new high last week, closing on Friday at a level of 3,397 and thereby erasing its historic plunge in February-March of this year. Supported by unprecedented monetary and fiscal stimulus and propelled by strong gains in large cap technology stocks, the S&P 500 has gained more than 50% since its late March low of 2,237. It took merely 126 trading days for the S&P 500 to recapture its former high this time around, marking the fastest recovery on record; on average, it has taken 1,542 trading days from the start of a bear market for stocks to recapture their losses.
Retailers Post Surprisingly Strong Earnings: Despite the COVID-19 pandemic’s prolonged disruption of the U.S. economy, large retail chains last week reported some of their strongest quarterly earnings in decades. Notable names exhibiting strong results for the three months through July included Target, Lowe’s, and Walmart, all of which received significant boots in e-commerce sales. In general, companies that sell household staples and home improvement goods have benefited from a surge in demand, while smaller chains and traditional department stores that were forced to close locations in the early days of the pandemic have suffered financially, forcing some, including J.C. Penney and Lord & Taylor, to file for bankruptcy.