Week of July 31 2015 Weekly Recap & The Week Ahead
“Don’t be afraid to take a loss. Mistakes are part of the game. The cost price of a security is a matter of historical insignificance, of interest only to the IRS.” — Arthur Zeikel
1. China Stock Dive Continues — the benchmark Shanghai index sank almost 10% last week, renewing doubt that Beijing can reverse fears about the safety of its equities markets. The Shenzhen index lost 9%. The losses nearly erased gains made since the low point of the earlier sell-off this month. China ‘s regulator later said that Beijing will step up stock purchases.
2. Standard & Poor Warns Brazil’s Investment Grade Rating At Risk — Standard & Poor’s has warned Brazil it could lose its coveted investment-grade rating in the coming year if fallout from a number of corruption investigations further stymies economic growth and implementation of austerity measures. The agency has now put the country’s foreign currency rating, which is rated one notch above junk, on negative outlook for possible downgrade.
3. Q2 US GDP at 2.3% vs 2.6% expected — U.S. economic growth accelerated in the second quarter as a pick up in consumer spending offset the drag from soft business spending on equipment. First-quarter GDP, previously reported to have shrunk at a 0.2 percent pace, was revised up to show it rising at a 0.6 percent rate. The Fed on Wednesday described the economy as expanding “moderately” while upgrading its view of the labor market and saying housing had shown “additional” improvement. The Fed’s assessment left the door open for a possible hike in interest rates in September, which would be the first rise since 2006.
4. AAII Bullish Sentiments — the latest survey of investor sentiment from the American Association of Individual Investors (AAII) also showed a large drop in bullish sentiment. This represents the lowest level since early June and the 18th straight week that it has been below the average reading of 38.19% since 2009.
The week ahead — Economic data from Econoday.com:
