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  • Writer's pictureKevin Hurley

Marketbites: Earnings Season Rolls On


Portfolio Manager Commentary:

The Dow Jones Industrial Average closed higher Tuesday, continuing its longest winning streak at 12 days in more than six years as traders weighed the latest earnings reports. General Motors shares fell about 3.5% even after the automaker hiked its full-year earnings guidance. Meanwhile, General Electric climbed nearly 6.3% on the back of stronger-than-expected revenue for the second quarter.

Elsewhere, UPS fell 1.9% after it reached a tentative deal with the Teamsters union, avoiding a strike. Meanwhile, Banc of California shares surged 11% and PacWest Bancorp shares dropped 27%. A report from The Wall Street Journal, citing people familiar with the matter, said Banc of California is in advanced talks to buy PacWest.

Investors are awaiting the Federal Reserve’s policy decision coming out today and will parse through Chair Jerome Powell’s comments for his economic outlook. Investors are overwhelmingly betting the Fed will raise rates by a quarter percentage point. However, they are less certain about what policymakers will do in September.

Chart of the Day:

There has been a shift in IPO investors' emotions from fear of losing money to fear of missing out. Over the past few weeks, significant obstacles to a resurgence in initial public offerings have been removed. U.S. stocks are steadily climbing towards new highs for the year, with reduced volatility and easing inflation. Moreover, investors are once again engaging in speculative betting.

Source: WSJ

What else is happening:

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  • Israel in tumult: Doctors strike, stocks tumble - read here

  • GE brings good things (its shares) back to life - read here

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