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On 29 June, The Architecture of Disruption posed the questions of which layer to own and at what price. We now have some answers.
Manuel Cañas, founder of Archipel Capital, has spent over 20 years reading markets.
August converted an exceptional earnings season into a more demanding equity-market test. The S&P 500 advanced 2.62%, led by Energy, Information Technology and Materials.
The dollar has been weakening through August due to growing concerns around US debt levels hitting $40 trillion and the US Treasury’s actions to try to reverse the sudden surge in yields that has followed.
From 18 August to 24 August, 14 S&P 500 companies, including 2 Dow Jones components (Home Depot and Walmart) reported earnings.
From 11 August to 17 August, 12 S&P 500 companies, including 1 Dow Jones components (Cisco Systems) reported earnings.
From 4 August to 10 August, 124 S&P 500 companies, including 9 Dow Jones components (Amgen, Caterpillar, McDonald’s, Merck & Co, and Walt Disney) reported earnings.
July was a month in which the tape told two stories simultaneously. At the index level, the S&P 500 finished marginally lower and its forward multiple compressed from 20.6x to 19.7x.
From 28 July to 3 August, 176 S&P 500 companies, including 9 Dow Jones components (Amazon, Apple, Boeing, Chevron, Microsoft, Procter & Gamble, Coca-Cola, Sherwin-Williams and Visa) reported earnings.
The dollar was, prior to the Fed decision on 29 July, showing resilient strength and staying near one-month highs on a hawkish Federal Reserve outlook.
From 7 July to 13 July, 93 S&P 500 companies, including 5 Dow Jones components (3M, Alphabet, IBM, Honeywell and American Express) reported earnings.
