Dow Win Streak Continues After Goldman Sachs Earnings

(Image credit: Bloomberg/Getty Images)

published 19 July 2023

Stocks opened higher Wednesday as Wall Street cheered an encouraging inflation report from overseas. Investor sentiment also got a lift from the latest round of corporate earnings reports, particularly those coming from the financial sector, which helped the Dow Jones Industrial Average extend its longest daily winning streak in almost four years.

Data from the U.K. overnight showed inflation rose 7.9% in June, below the 8.7% increase seen in May and less than economists were expecting. Core inflation, which excludes volatile food and energy prices, at 6.9%, also came in below estimates, as well as the previous month's 7.9% reading.

"Disinflation is happening everywhere and that is good news for stock market bulls," says Edward Moya, senior market strategist at currency data provider OANDA. "U.K. prices are still high, but cooling inflation could support the argument that the Bank of England will be done tightening after the September meeting."

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Back at home, data from the Census Bureau showed June housing starts and building permits both came in lower than expected. Still, Michael Reinking, senior market strategist at the New York Stock Exchange, doesn't see much cause for concern.

"With demand-supply imbalance, new home inventory has fallen, but homebuilders are increasing unit construction," Reinking says. Higher interest rates will weigh on demand in the short term, but "resale listings, and therefore refinancings, should remain low supporting the longer-term demand for new units," he adds.

Goldman Sachs, Carvana report earnings

In single-stock news, blue chip financial giant Goldman Sachs (GS) reported lower-than-expected second-quarter earnings of $3.08 per share, though revenue of $10.9 billion exceeded estimates.

"The big banks saved the worst earnings report for last," Moya says. "This was a bad quarter for Goldman Sachs and that should not have come as a surprise considering how equity capital markets have been and the slowdown Wall Street has seen with M&A." However, the blue chip stock managed to close 1.0% higher as "optimism remains for more initial public offerings (IPOs) and dealmaking," the strategist notes.

Elsewhere, Carvana (CVNA) stock popped 40.2% after the used car retailer disclosed a slimmer-than-expected Q2 loss of 55 cents per share. The company also beat on the top line, reporting $2.97 billion in revenue. Additionally, Carvana said it reached a deal with bondholders that will allow it to restructure its debt.

As for the major indexes, the Dow finished up 0.3% at 35,061 – its eighth straight win, the longest such streak since September 2019. The S&P 500 rose 0.2% to 4,565, while the Nasdaq Composite eked out a marginal gain to end at 14,358.

Is Apple the next AI stock?

Apple (AAPL) isn't scheduled to appear on the earnings calendar until early August. However, the tech giant made plenty of waves today after a Bloomberg article indicated it is working on its own generative artificial intelligence (AI) tool to rival OpenAI's ChatGPT.

While Apple has yet to confirm any specific artificial intelligence efforts on its part, the industry is expected to grow by leaps and bounds through the end of this decade. Fortune Business Insights, for instance, expects the global artificial intelligence market size to expand by 21.6% annually through 2030 to reach $2.0 trillion.

For investors looking to gain exposure to this surging market, there are plenty of opportunities among the best AI stocks. There are also the best AI ETFs for those that want a broader approach to the industry.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.