 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Friday's Headlines 1. S&P 500 and Nasdaq Hit Fresh Highs on Earnings 2. Sprint and T-Mobile Get Merger Approval 3. U.S. Q2 GDP lands at 2.1% 4. Next Week is HUGE Markets Closed
Year-to-Date
 Markets Today
What a week! Here are a few fun facts to take into the weekend:
Here's 50 years of the S&P 500 via Koyfin Charts:  The New T-Mobile is Ready for Service
At long last, the U.S. Justice Dept. approved the $26 billion merger between the third and fourth largest U.S. carriers, pending the sale of various assets. In order for the Justice Dept. to green light the merger, the combined company will divest Sprint's prepaid businesses and 800 MHz spectrum assets to DISH Network, in addition to other stipulations.
Meanwhile, 13 states—led by California and New York—are suing to block the merger, citing antitrust violations. Assuming the New T-Mobile prevails in those suits, the combined company will be ready for business in early 2020.
The Race for 5G Beyond the business synergies the combined companies are boasting, which total $43 billion according to their press release, this merger is all about scale and 5G dominance.
Read more: 5 Things to Know About 5G
5G, the ultra-fast next generation of wireless technology that is supposed to revolutionize everything from driverless cars to smart cities and the Internet of Things, is the new battleground for telecom and communications companies. Verizon, AT&T, and just about every major telecom provider and technology company is trying to plant their flag in the 5G space, and the Sprint T-Mobile tie up is about that more than anything. True, they need to combine to create scale to compete with AT&T and Verizon in the U.S., but the battle is for the future, and these companies have a long way to go to catch up.
chart courtesy pcmag.com  U.S. GDP: It's a BBQ Economy Not too hot, not too cold...kind of simmering. That's how you might describe the U.S. economy for the second quarter of 2019.
Data from the Commerce Dept. showed that the U.S. economy grew at an annualized 2.1% rate in the second quarter, down from 3.1% in the first quarter, but higher than forecast. The Commerce Dept. also revised the fourth quarter of 2018 downward, from 2.8% to 2.5% in its measurement of Real GDP.
Read more: What is Real GDP?
Unlike nominal GDP, Real GDP can account for changes in price level and provide a more accurate figure of economic growth. It's a small detail, but important given the Federal Reserve's focus on inflation, or the lack thereof lately.
Inside the Commerce Dept's release was more details on what we already know through other reports and anecdotal information from industries.
So, consumers and the government are keeping the fire lit under the U.S. economy as businesses have been tightening up due to the trade war, a global economic slowdown, and the loss of the tailwind from the Trump tax cuts of 2017.
One metric that got our attention was the massive jump in savings rates. Consumers are putting away money at historic levels as wages have increased and unemployment is low.
chart courtesy BofA Merrill  What Does it Mean? The high savings rate is a function of the amount of disposable income consumers have. That's a good sign for the economy in the midst of a broader economic slowdown. Should the U.S. fall into a recession, consumers may be better prepared than they were in 2008-09. If the U.S. avoids a recession, but continues to slow, consumer spending and saving could backstop the economy until businesses get their footing back since consumer spending makes up 70% of GDP.
The bad news for savers... The average interest rate U.S. banks will pay is just 0.1%, per the FDIC. It's smart to save—it just doesn't pay much to do it.
chart via https://www.fdic.gov/regulations/resources/rates/  What to Watch for Next Week Next week is critically important. The Federal Open Market Committee of the Federal Reserve will meet Wednesday on interest rates, as we keep reminding you, and most Fed watchers are expecting a 0.25% cut to the overnight lending rate. The Fed, led by Chairman Jerome Powell has said the Fed will "act accordingly" to "sustain the economic expansion."
Everyone has interpreted that as a rate cut, and the question is whether that will be a 0.25% or 0.50% cut. Traders overwhelmingly believe it will be the former. Investors will also be listening closely to what the Fed says about the outlook for the U.S. economy for the rest of the year for any hints about future rate cuts.
The FOMC meeting will set the tone for the week and arguably the rest of the year for the U.S. economy. However, there are several other important economic reports to keep an eye on next week, as well.
Outside the U.S., these economic reports and events will also be important:
It's also another huge week for corporate earnings as 1,085 companies are set to report their quarterly results.
Yahoo Finance has a great earnings calendar if you are looking to follow your favorite companies.
(Correction: Yesterday, in recapping Starbucks earnings, I incorrectly used the word "headwind," instead of "headway," when describing its progress in Europe. Thanks to Janet for pointing that out.)
chart courtesy www.koyfin.com  Shares of Universal Health Services, a hospital management company, rose by almost 11% after both its Q2 earnings and revenues beat estimates. Alphabet had one of its best days in nearly four years upon reporting strong second-quarter sales results, leading to an over 10% increase for both its A and C share classes.  Flooring manufacturer Mohawk Industries reported concern regarding the potential business environment for the latter half of 2019, which resulted in an almost 18% stock decrease. Cabot Oil & Gas, despite beating its Q2 earnings and revenues estimates, still fell by just over 12%—possibly due to lower natural gas prices.  Word of the Day Momentum is the rate of acceleration of a security's price or volume—that is, the speed at which the price is changing. Simply put, it refers to the rate of change on price movements for a particular asset and is usually defined as a rate. In technical analysis, momentum is considered an oscillator and is used to help identify trend lines.  photo courtesy loc.gov (That's Edison with his phonograph)
Today in Financial History July 26, 1881: Thomas Alva Edison files a U.S. Patent application (No. 479,184) for a facsimile telegraph. Although the fax machine is first commercialized by AT&T and Western Union in the 1920s, it does not catch on until more than 70 years after Edison patents it.
http://edison.rutgers.edu/chron2.htm#81
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Friday, July 26, 2019
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