The S&P 500 has its best month since November 2020.

July turned out to be the best month for Wall Street equity investors since November 2020. This is a bet that the Federal Reserve will be able to reduce its economic constraining policies faster than previously expected, boosted by higher-than-expected financial results from major US companies. ..

The S & P 500 rose 1.4% on Friday, rising 9.1% in July. This is the best month since the first announcement of an effective Covid-19 vaccine helped increase inventory by nearly 11% in November 2020.

This is a sudden change in timbre after a particularly difficult stretch. Investor sentiment was underpinned by signs that some of the largest US companies were successful in surviving economic headwinds, including slowing growth and rising interest rates. This week, Marquee Tech names such as Apple, Microsoft, Amazon and Alphabet reported reassuring investors as their size and performance have pushed the stock market to new highs in recent years. Shares of all four were high week and month.

At the same time, investors seemed to be comforting the latest Federal Reserve Board, interpreting that the central bank was willing to slow the pace of rising interest rates as the economy began to cool. Rising interest rates increase corporate costs, squeeze profits, and align investors with signs of Fed’s current policy easing.

Alex Atanasiu, Portfolio Manager at Glenmede Investment Management, said: Despite the Federal Reserve raising interest rates on Wednesday, long-term government bond yields, which help set borrowing costs around the world, declined with expectations for further interest rate hikes, “and it strengthens equities. “He added.

Of the 278 S & P 500 companies that have reported revenue so far, 209 have exceeded analysts’ expectations, according to Howard Silverblatt, senior index analyst at the S & P Dow Jones Index.

Amazon’s share price surged more than 10% on Friday after Thursday’s earnings report, adding about $ 140 billion to the company’s market valuation. Amazon is one of the best performing stocks, rising over 28% in the past month. With a market value of approximately $ 1.4 trillion and the weighting method of the S & P 500 index, this move will have a significant impact on index performance.

Only Apple, the world’s largest company with a market value of about $ 2.6 trillion, has had a major impact on the S & P 500 this month. Apple’s share surged 19% in July.

There were other bright spots. European stocks rose nearly 8% this month, despite growing concerns over Italy’s economic and political health and the lack of natural gas towards the winter. According to an index operated by Bloomberg, the corporate bond market has returned more than 5% of the debt of risky “junk” rated companies. This was the best month of performance since October 2011.

Despite the strong performance, some investors remain vigilant, warning that the recent backlash could be released as soon as possible.

Chief Investment Officer David Donavedian said: CIBC’s US Private Wealth Business

The uptrend reflects that the current round of updates from the US for companies isn’t as bad as feared, which is different from what they are good at. Investors fell more than 8% on the S & P 500 in June, ahead of current earnings results, with the index below its January peak by about 14%.

Some investors are also willing to continue to buy stocks during very high inflation, as other safer assets do not provide returns that allow them to protect themselves from the erosive effects of rising prices. Said.

“I’m not as optimistic as the market,” said Lauren Goodwin, an economist at New York Life Insurance. “But running towards the hills when inflation is very high is only a hindrance to returns. We must continue to invest.”