Good Evening! On Friday, the stock market exhibited a mixed performance; however, it concluded the week with an overall upward trend. Additionally, recent survey data indicates a growing sense of optimism among Americans regarding the state of the economy.
The S&P 500 and Nasdaq Composite finished the week in the red by 0.10% and 0.18% respectively. The Dow Jones was the outlier by finishing today in the green by 0.33%.
30 YEAR LOW?
AT&T Inc. (T) experienced a significant decline on Friday, reaching a level that hasn’t been seen in nearly thirty years. This decline was attributed to the increasing concern surrounding the potential financial burden that the company may incur in addressing the damage resulting from the presence of lead-clad wiring in various segments of its nationwide network.
How big could it be? The matter was brought to light earlier this week through a report in the Wall Street Journal, which highlighted the presence of lead cables that were utilized in the initial landline networks established by telephone companies during the first half of the 20th century. Which… are currently held by multiple national carriers, like AT&T, Verizon Communications Inc., and Lumen Technologies Inc.
The problem doesn’t stop there… The issue of lead concerns further compounds the existing difficulties faced by the company during this particular year. In April, AT&T disclosed a free cash flow of $1 billion, falling short of the analyst’s projected target of $3 billion. This outcome has raised concerns for the second consecutive year regarding the company’s dividend payments. In the previous month, the company issued a cautionary statement regarding the wireless subscriber growth, which fell short of initial projections as well.
CONSUMER SENTIMENT IS UP
The prevailing gauge of consumer confidence in the United States economy has recently risen to its highest level since September 2021.
So how big was the rise? The University of Michigan Consumer Sentiment Index recorded a reading of 72.6 for the initial July assessment. The report exceeded economists’ expectations of 65.5 by a significant margin, indicating a 13% rise compared to the previous month. This indicates the most rapid rate observed since December 2005, a period that witnessed the economy’s recovery from the aftermath of Hurricane Katrina.
What has aided the confidence? Consumers have been presented with several positive factors that have developed confidence. These include a month characterized by mostly robust economic data, optimistic reports marking the beginning of second-quarter earnings, and diminishing concerns regarding a potential second Federal Reserve rate increase in the latter part of the year. These factors have contributed to the upward trajectory of the 2023 stock market rally.