| Friday's Headlines 1. US markets rally to end week behind tech stocks 2. Apple has become the biggest public company in the world 3. US personal income and savings start to sag 4. European consumer confidence rises as US falls 5. What to expect next week Markets Closed
Year-to-Date
 Photo courtesy GettyImages
Markets Today U.S. markets ended the week and the month on a fruitful note as tech stocks, led by Apple, rallied on the heels of strong earnings reports yesterday. Apple, which announced a 4-for-1 stock split yesterday, soared to a new record high, and became the most valuable company in the world by market cap.
The EU reported its worst quarterly GDP decline since records began, falling 12.1% last quarter, which was even worse than the U.S. But European countries have succeeded in taming the coronavirus, so their rebound is in full-effect. We can see it in manufacturing and industrial reports, but also in consumer spending.
Here in the U.S., Congress remains divided over the next stimulus bill but with a week to go before policymakers take a summer break, time is running out. Headlines:
 chart courtesy BEA
Savings and Personal Income Start to Slide Just as the stimulus payments ended last week and unemployment started to rise in July, U.S. personal income (excluding transfers) increased 1.4%, but declined 3.6% year over year. The U.S. savings rate remains elevated at 19%, down from 24.2% in May.
There is strong evidence that shows U.S. consumers were banking their stimulus payments in May and June, and saving for a rainy day. They may not have known that the rainy days of May would last through the summer, and potentially beyond. As Congress debates the latest stimulus bills just before its members head out for a vacation, the drop in personal income and savings should be a red siren blaring in their ears as Americans, especially those who have lost their jobs, start to run low on cash.  Chart courtesy MorningConsult
European Consumers are Feeling Much Better The stark difference in consumer confidence between U.S. and European consumers is a reflection of how we have handled the virus over the summer. We simply have not handled it well in the U.S., and while consumer spending was rising in the first few weeks of July, that quickly faded over the past two weeks, while it has been steadily rising, or staying level, throughout Europe's major economies. What to Expect Next Week Despite the uncertainty and the stop and start rally for tech stocks, July was a winning month for U.S. markets. Here's a look at how the major U.S. markets, along with China, Europe, and other asset classes have performed year-to-date.
Chart courtesy YCharts  Events Next Week Sunday, August 2:
Monday, August 3:
Tuesday, August 4:
Wednesday, August 5:
Thursday, August 6:
Friday, August 7:
Earnings Wind Down
On the flip side, video game maker Activision Blizzard (ATVI) may actually stand to benefit from the quarantine. With activities like movie theaters and live music off limits due to COVID-19, video games are a major form of media left unaffected. Analysts are expecting earnings growth and the largest revenue gain in years this quarter when ATVI reports this week.
Finally, Uber (UBER) falls a bit in the middle, as it has businesses that are helped, and those that are hurt, by the quarantine. On one hand, the pandemic has cut down on travel and the desire of most people to get into a stranger's car, so analysts are predicting a sharp drop-off in revenue for Uber's ride-sharing segment. However, with dine-in restaurants closed, Uber's food deliver segment, Uber Eats, is expected to see substantial growth. How much the latter's growth will offset the former's decline remains to be seen.
U.S. Unemployment
Central Bank Decisions
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(chart courtesy YCHARTS)  Since it's the end of the month, we are giving you July's winners and losers, today.
L-Brands, the retail conglomerate, was the best performing stock of the month in the S&P 500, and it got there by shrinking its business, killing brands, and laying off workers. Shares of AMD soared in July as Intel's losses were AMD's wins.  Energy companies continue to rack up losses in 2020, with three oil services and production companies among the worst ten stocks of the month. Cruise ships and airlines also can't catch a break, as the resurgence of the coronavirus has destroyed luxury and discretionary travel. Intel missed a big launch deadline, and investors punished the stock, pushing it down 20% for July. Word of the Day Personal income refers to all income collectively received by all individuals or households in a country. Personal income includes compensation from a number of sources, including salaries, wages, and bonuses received from employment or self-employment, dividends and distributions received from investments, rental receipts from real estate investments, and profit sharing from businesses.  Photo: AtlasNetwork.org
Today in History 1912: Milton Friedman is born in Brooklyn to Ethel Landau Friedman, a storekeeper, and Jeno Saul Friedman, who dealt in "unsuccessful 'jobbing' ventures." After decades as America's leading conservative economist and one of the world's greatest intellectual defenders of free markets, Friedman wins the Nobel Prize in economics in 1976.
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Friday, July 31, 2020
Juicy Fruit
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