What happened in July?

Despite unsettling news in the tech sector, U.S. equities rose in July on a more optimistic trade outlook, generally positive earnings data and economic growth. The 2nd quarter earnings season kicked off with notably negative news from Facebook and Netflix as both tech giants struggled to keep up new user acquisition. Facebook’s report showed the impacts of the data scandal earlier this year with lagging daily user data and unexpectedly negative guidance for the remainder of the year. The NYSE FANG+ index which is comprised of popular tech companies like Facebook, Amazon and Netflix slid into correction territory for the second time this year. Overall, earnings season has proved largely positive so far with just over 83% of companies in the S&P 500 having reported and 73% of those reporting above expectations.

International economic figures released during the month lagged behind the U.S., which posted a 4.1% GDP growth rate during the second quarter, its largest quarterly increase since 2014. The Eurozone economy grew at a rate of 1.4% during the same period, the slowest in 3 years, and Mexico’s economy contracted. The Chinese manufacturing purchasing manager index slid to a 5-month low in July, possibly as a result of the impacts of U.S. tariffs and trade disputes.