U.S.-Stock Funds Rise for the Month, Helped by Earnings Reports

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Despite being buffeted on all sides, the stock market continues to power ahead. The question is how long corporate earnings, a big driver of this resilient market, will remain solid.

Despite being buffeted on all sides, the stock market continues to power ahead. And mutual-fund investors are benefiting.

The question is how long corporate earnings, a big driver of this resilient market, will remain solid. And of course, how will Covid-19 play out from here? The total return of the average diversified U.S.-stock fund was 0.7% for July, according to Refinitiv Lipper data, pushing the year-to-date advance to 16.5%. International-stock funds were up 0.1% for the month, to push their year-to-date average gain to 9.2%.

Inflation, and what the Federal Reserve might do about it, remains a concern for companies and investors. “One of the most interesting observations this earnings season is the number of references to inflation,” says Ellen Hazen, portfolio manager at F.L.Putnam Investment Management in Wellesley, Mass. Management teams of the 340 companies in the S&P 500 that have reported their earnings so far, says Ms. Hazen, “referenced inflation 661 times in their prepared remarks”—up from 200 references for the previous quarter.

 

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