Today's Scoop:

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Here’s what you need to know today…

1. Companies have cut back on layoffs.

2. A shortage of homes on the market has stalled sales and kept prices high.

3. US manufacturing is trying to make a comeback.

S&P 500: 4,534.87
1Mo: +4% | 1Yr: +13% | 5Yr: +61%

The market took a break from its rally today as investors digested a slew of underwhelming updates from big tech companies like Tesla, Netflix, and Taiwan Semiconductors.

Companies have cut back on layoffs. The Labor Department reported initial jobless claims fell again last week to 228,000, in line with pre-pandemic averages. But, people might be having a harder time finding work. Continuing claims, which include those who have been unemployed for longer than one week, rose for the second straight week by the most in three months. Unemployment still remains near historic lows.

There are fewer homes on the market, and it’s keeping home prices high. The National Association of Realtors reported 3% fewer homes were sold in June as the median existing house price rose to $410,200. Mortgage rates are very expensive, nearly 7%, encouraging homeowners to hang on to their cheaper existing rates. The available homes supply is roughly half what it normally is.

The manufacturing sector is showing some signs of a turnaround. The Philadelphia Fed’s index of business activity indicated negative growth for the eleventh straight month. New York’s gauge also indicated low activity. Both surveys indicated rising optimism from business owners, though.

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• Johnson & Johnson racks up more cancer lawsuits

• United Airlines notches record profits

• Taiwan Semiconductors warns of a steep tech slowdown

• Tesla loses profitability to price wars

• Netflix’s password-sharing crackdown boosts subscribers

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Earnings Per Share (EPS)

Earnings Per Share (EPS) is one of the two main metrics you'll find in the news about a corporation's quarterly financial update. Earnings is another word for profit, and so is net income. Earnings per share are the company's profit divided by the number of shares available. It's a standard way for an investor to evaluate whether the company is earning more or less profit this quarter than the investor expected.

Understanding how much the stock price is marked up over the company's profitability is also helpful. That's called a price-to-earnings multiple (P/E multiple). If one company's share price is 15x higher than its earnings per share, investors are more confident in its future growth than a company whose share price is 12x its EPS.

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