The US stock market posted relatively modest gains in July, with trade, earnings, and monetary policy dominating headlines throughout the month. The S&P 500 and Dow Jones Industrial Average inched up by 0.54% and 0.55%, respectively. The tech-heavy NASDAQ Composite appreciated by 1.04%.
The month had a mixed start, with some positive signals from the ongoing US-China trade dispute. On June 29, it was announced that the US would restart trade negotiations with China following a meeting between President Trump and Xi Jinping during the G20 summit in Japan. Trump said the US would cut down restrictions on Huawei and delay imposing new tariffs, while China was expected to buy more US agricultural products. However, as the month went on, it became clear little progress would be made. The week-long negotiations in Shanghai concluded on July 31 with no deal reached. President Trump renewed his Twitter attacks on China, saying it was not delivering on its promise to buy US agricultural products.
At the same time, US-EU trade relations took a turn for the worst at the beginning of July, as reports suggested the US might impose new tariffs on $4.0 billion worth of European goods.
However, the pressure put on US stocks by trade tensions were offset by positive signals coming from the Fed. On July 10, Fed chairman Jerome Powell appeared before the House Committee on Financial Services, where he suggested that the FOMC might cut the interest rates at the end of the month, due to higher uncertainties about the outlook. At the end-of-July meeting, the FOMC cut the interest rates by 25 basis points to 2.00% – 2.25% for the first time in 11 years. The Committee cited “implications of global developments” on the economic growth and inflation pressure.
Investor sentiment was also lifted by positive jobs and economic growth data. Non-farm payroll data showed that the US economy gained 224,000 jobs in June, much higher than the expected 160,000 and 72,000 posted a month earlier. The unemployment rate amounted to 3.7%, versus the previous month and an expected figure of 3.6%.
At the same time, US economic growth figures came in last month, which showed the economy growing by 2.1% in the second quarter, which was lower than 3.1% in the previous three months, but better than the anticipated 1.9%.
In the second half of the month, the earnings season kicked off and took the spotlight. By July 26, 44% of S&P 500 companies reported their second-quarter results, according to FactSet. Out of these, 77% posted an earnings surprise and 61% reported better-than-expected revenue.
Now that we’ve done a general overview of the US stock market in July, let’s take a look at some individual stocks that captured the attention of Financial Advisors last month. The team at TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, compiled a list of most searched tickers among Financial Advisors last month. On the first spot in their list was Tesla Inc. (NASDAQ: TSLA), which posted disappointing financial results on July 24. The company’s second-quarter net loss of $1.12 per share, missed the estimates by a whooping $0.72, while revenue of $6.35 billion was $90 million lower than expected.
Semiconductor manufacturer Micron Technology, Inc. (NASDAQ: MU) ranked on the second spot, as the entire industry was in the spotlight amid the US lifting restrictions on Huawei and potential progress in US-China negotiations.
Facebook Inc. (NASDAQ: FB) was the third most-searched ticker last month. The company’s second-quarter non-GAAP EPS of $1.19 was better than the consensus estimate of $1.87, while revenue of $16.98 billion appreciated by 28% on the year and topped expectations by $400 million.
Ford Motor Company (NYSE: F) ranked fifth on TrackStar’s list. In addition to non-GAAP EPS of $0.28, which missed the consensus by $0.03 and revenue of $35.76 billion, which topped the expected $35.21 billion, Ford also announced last month that it will expand its alliance with German automaker Volkswagen to cover electric vehicles. In addition, Volkswagen said it would invest $2.6 billion in Ford’s autonomous vehicle technology platform Argo AI.
However, one stock that stands out among these giants of the stock market is Karyopharm Therapeutics Inc (NASDAQ: KPTI), a $500 million pharmaceutical company that focuses on development of drugs for the treatment of cancer.
Karyopharm’s shares surged by 57% in the first three days of the month and ended July 55.65% in the green, on the back of the US Food and Drug Administration approving the company’s drug. The drug in question is XPOVIO (selinexor), and it was approved for the treatment of penta-refractory multiple myeloma.
During a conference call following the approval, Karyopharm said the wholesale price of XPOVIO will be $22,000 per month and it will be distributed through specialty pharmacies, including AmerisourceBergen Corp. (NYSE: ABC) and McKesson Corporation (NYSE: MCK).
The approval of selinexor also caused several analysts to upgrade their outlook on the stock. Baird boosted its price target to $25 from $15, estimating $150 million in peak annual sales. RBC also raised their target to $22 from $16. JPMorgan analysts upgraded the stock to ‘Overweight’ with a $16 price target, citing strong support for the drug from a survey of doctors.
In the near future, Karyopharm anticipates releasing selinexor on sale in Europe, with the marketing application currently under review by the European Medicine Agency. In addition, the company plans to apply to have the drug approved for the treatment of large B-cell lymphoma, for which it received the Fast Track designation last year.