Sign InFriday Markets: U.S. Markets Rally, Consumer Spending Holds Strong, and iPhone Shipments Rebound
Alex Vellor
Market Momentum: A Six-Day Winning Streak
The U.S. stock market is riding a wave of optimism as the S&P 500 and Nasdaq Composite marked their sixth consecutive day of gains on Thursday.
The S&P 500 rose by 1.61%, while the Nasdaq Composite saw an even larger boost of 2.34%. The Dow Jones Industrial Average also continued its upward trajectory, climbing 1.39% for a third straight positive session.
These gains came on the back of positive economic data that has investors feeling more confident despite recent concerns. A jobs report earlier in August had sparked fears of an economic slowdown, but the market's resilience this week suggests those fears may have been overblown. By the end of Thursday, all major indexes were up between 2.5% and 5% for the week, with one trading day remaining.
Premarket Movers:
| Company | Stock Change | News |
|---|---|---|
| Kroger (NYSE:KR) | +1.1% | Announced plans to lower grocery prices by $1 billion after the completion of its proposed $25 billion merger with Albertsons (NYSE:ACI). |
| Ford (NYSE:F) | +0.1% | Recalling about 85,000 Explorer SUVs equipped with the Police Interceptor Utility package over concerns of an engine fire. |
| Applied Materials (NASDAQ:AMAT) | -2.1% | Stock fell despite forecasting fourth-quarter revenue slightly above estimates, giving back some of its recent gains. |
| Nvidia (NASDAQ:NVDA) | +0.5% | Jefferies stated the chipmaker is likely to continue delivering earnings beats, though smaller ones in the coming quarters. |
| H&R Block (NYSE:HRB) | +8.4% | Announced a 17% dividend increase and a $1.5 billion share buyback. |
| Coherent (NYSE:COHR) | +3.1% | Reported a jump in fourth-quarter revenue, driven by AI-related strength in its Datacom transceiver business. |
Consumer Spending Stays Strong: A Positive Surprise
Amid concerns about inflation and economic uncertainty, consumer spending has emerged as a bright spot.
According to data from the Commerce Department, retail sales in July exceeded expectations, increasing by 1% on a seasonally adjusted basis. This was a significant jump from the 0.3% increase that economists had predicted, signaling that consumers are still opening their wallets despite inflationary pressures.
Walmart CEO Doug McMillon added to the positive sentiment, noting that prices on groceries and other essentials are starting to come down. In a statement following Walmart’s second-quarter earnings report, he emphasized that while some cost increases remain, the company is pushing back hard against them to ensure lower prices for consumers.
Rebound in iPhone Shipments: A Sign of Strength in China
Apple's (NASDAQ:AAPL) iPhone shipments in China showed a promising rebound in June, as reported by Bernstein. This marks a significant recovery, with iPhone shipments increasing by 5% year-over-year, overtaking Huawei in the process. The overall smartphone market in China grew by 3% during the same period, driven by a 24% increase in Huawei’s shipments. However, non-Huawei Android devices saw a slight decline of 1%.
Year-to-date, smartphone shipments in China are up 8%. Huawei has been a major driver of this growth, with a remarkable 68% surge in shipments, while non-Huawei and non-Apple brands have seen a modest increase of 3%. Apple’s performance, however, has been less impressive, with shipments down 7% over the same period.
Despite concerns about elevated iPhone inventories in China, Bernstein’s report suggests that investors should not be overly worried. The recovery in June, especially with the discounts likely boosting iPhone sales, indicates that Apple may be stabilizing in this crucial market.
About The Author
Alex Vellor
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