Stocks Decline As Yields Rise And Earnings Bottom

With the vast majority of earnings reports complete in the wake of the busiest week of the season, the headline earnings decline moderated to better than the decline expected at the end of the quarter. The S&P 500 fell by over 2% for the week, pressured by the 10-Year Treasury yield climbing above 4%. This week’s earnings reports decline to a trickle, with only 33 companies reporting. In the wake of the mixed July jobs report, the consumer price index (CPI) report on Thursday will be the primary focus.

With the end of the reporting season in sight, blended earnings, which combine actual with estimates of companies yet to report, are almost sure to end better than forecasts at the end of the quarter. The consumer discretionary sector is expected to post the highest year-over-year growth rate at 52.1%. This increase is primarily due to Amazon.com (AMZN), which had a significant earnings beat after reporting a loss in the second quarter of 2022.