Market Insights July 2022


Monthly Market Roundup | U.S. Equities

Big Movers In July 2022


Enphase Energy (ENPH): The solar-energy company beat earnings and revenue estimates. It also forecast strong third-quarter growth, partially because the Ukraine crisis is boosting demand in Europe.


Newmont Goldcorp (NEM): The goldminer missed earnings forecasts as lower selling prices and cost inflation squeezed profits. Management also lowered its production target.


Etsy (ETSY): The e-commerce company reported better-than-expected earnings and revenue as user growth continued. Management also predicted that platform upgrades will support profits in coming quarters.


AT&T (T): The telecom giant lowered its free-cash flow guidance because of higher costs. Management blamed difficulties adding users and slower payments by customers. Rival Verizon Communications (VZ) also fell on similar news.


Ford Motor (F): The automaker beat earnings and revenue estimates as it sold higher-margin SUVs. The news relieved fears of supply-chain challenges.


Baker Hughes (BKR): The oilfield-servicing company missed earnings and revenue estimates because of supply-chain shortages and cost inflation.

Key Economic Events Last Month

TSG - Red icon

Manufacturing Index Hits a 2-year Low

The Institute for Supply Management's factory index hit a two-year low in June as new orders and employment slowed. (1/7) Similar reports for July from the Philadelphia Federal Reserve (21/7) and S&P Global (22/7) also showed weakening.

TSG - Red icon

Housing at a crossroads?

NAHB's homebuilder sentiment index fell the most ever (18/7) as higher mortgage rates hurt demand. Housing starts (19/7), existing home sales (20/7), new home sales (26/7) and pending home sales (27/7) also missed estimates.

TSG - Red icon

Fed Hikes Again But Hints at Slower Moves

The Federal Reserve raised interest rates by 75 basis points as expected. While Chairman Jerome Powell remained vigilant against inflation, he acknowledged the economy is slowing and said it may “become appropriate to slow the pace of increases.” (27/7)

TSG - Red icon

Economy Shrank Again in 2nd Qtr as Investment Drops

Gross domestic product (GDP) fell 0.9% in the second quarter, missing estimates for growth of 0.5%. Investments in inventories and homes shrank, while consumer spending barely grew. The contraction followed a -1.6% reading in the first quarter. (28/7)

Key Futures Contracts

Product Name Current Month Expiration Next Month 1-Mon%
S&P 500 E-Mini (@ES) ESU22(Sep) 16 Sep 2022 ESZ22(Dec) +9.1%
S&P 500 E-Mini Micro (@MES) MESU22 (Sep) 16 Sep 2022 MESZ22 (Dec) +9.1%
Nasdaq-100 E-Mini (@NQ) NQU22 (Sep) 16 Sep 2022 NQZ22 (Dec)
Nasdaq-100 E-Mini Micro (@MNQ) MNQU22 (Sep) 16 Sep 2022 MNQZ22 (Dec) +12.5%
Dow Jones E-Mini (@YM) YMU22 (Sep) 16 Sep 2022 YMZ22 (Dec) +6.6%
Dow Jones E-Mini (@MYM) MYMU22 (Sep) 16 Sep 2022 MYMZ22 (Dec) +6.6%

Events to Watch This Month

Date Event WhattoWatch
Fri, 5-August Employment Report for July Non-farm payroll changes and revisions, unemployment, wage inflation.
Wed, 10-Aug
Thu, 11-Aug
Inflation reports for July Consumer prices are due 10 August, followed by producer prices on 11 August.
Tues, 16-Aug Housing starts, building permits for July How much have higher interest mortgage rates slowed homebuilding?
Wed, 17-Aug Retail sales, Federal Reserve minutes Retail sales in the premarket show consumer activity in July. Fed minutes in the afternoon provide details on policymaker discussions at July’s meeting.
Thu, 25-Aug Jackson Hole Symposium, GDP revision Fed officials begin a three-day event with multiple speeches. The Commerce Department also revises second-quarter gross domestic product numbers.

Sector Watch


Consumer discretionary stocks had their biggest gain since April 2020 as strong quarterly results lifted companies like Tesla (TSLA) and (AMZN).

Technology rallied as investors returned to growth stocks. The sector also got a boost from semiconductors as Congress voted to support chipmakers.

Industrial stocks moved broadly higher. There were gains in manufacturing-related companies, rental firms and transports.

Energy stocks rebounded from a sharp decline in June as inventories remained tight and Russia cut natural-gas shipments to Western Europe.

Noteworthy Calls & Predictions


Citi strategist Scott Chronert: Stocks could gain into yearend, fueled by stronger-than-feared earnings. He also saw the potential for multiple expansion with peak hawkishness by the Federal Reserve priced in. His December target for the S&P 500 was 4,200.


Barry Bannister of Stifel: S&P 500 could rebound to at least 4,200 this summer because “recession fear is over-done.” He cited a strong labor market and the potential for positive earnings surprises.


Michael Hartnett of BofA: Investor capitulation may have peaked as cash reserves swell to the highest level in over 20 years. His survey of portfolio managers also showed grim outlooks for profits and the economy. BofA said the pessimism could serve as a contrarian bullish signal.


Ed Yardeni of Yardeni Research: June’s trough of 3,667 for the S&P 500 was probably the low for the year because the economy and earnings are likely to perform better than feared. JPMorgan Strategist Nikolaos Panigirtzoglou writes that stock prices imply an 85% chance of a U.S. recession. He also thought the economy would avoid a hard landing.


Diana Olick of CNBC: Homebuilders are offering buyers more incentives to offset weaker demand. Fewer permits and housing starts may point toward a slowdown for an industry squeezed by higher mortgage rates



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