July 24th – Weekly Update

  • The S&P 500 and Nasdaq ticked up while the Dow Jones lost some ground during a week focused on earnings commentary and political controversies. Gold finished the period higher, rising for the sixth consecutive session. Oil dropped and the 10-year U.S. Treasury yield closed at approximately 2.24%.
  • With 19% of S&P 500 companies having reported second quarter results, 73% have beaten earnings expectations while 77% have beaten sales expectations. According to FactSet, the second quarter blended earnings growth rate estimate for the S&P 500 is 7.2%. Avista Corp., Sears Holding, and Nike impressed this week; Maxim Integrated Products, General Electric and Alliance Data Systems were among the disappointments.
  • President Donald Trump’s business transactions are now being investigated by Special Counsel Robert Mueller as part of his investigation into Russia’s meddling in last year’s election.
  • Bloomberg reported that Mueller is examining a broad range of transactions involving Trump’s businesses, as well as those of which he is associated. The article, which cited a person familiar with the probe, said “FBI investigators and others are looking at Russian purchases of apartments in Trump buildings, Trump’s involvement in a controversial SoHo development with Russian associates, the 2013 Miss Universe pageant in Moscow and Trump’s sale of a Florida mansion to a Russian oligarch in 2008.”
  • Weekly initial unemployment claims came in at 233K, lower than last week’s upwardly revised 248K (was 247K) and below consensus for 245K. This is the lowest reading since May 2012. The four-week average decreased 2,250 to 243.75K.
  • June housing starts came in at a seasonally adjusted annual rate (SAAR) of 1.215M, better than the upwardly revised May rate of 1.122M (was 1.092M) and consensus for 1.160M. Housing starts rose 8.3% month to-month and 2.1% higher year-over-year.
  • The Philadelphia Fed index dropped to 19.5 in July, down from 27.6 in June and below consensus for 24.0. Indexes for general activity, new orders, shipments, employment and work hours all remained in positive territory, but fell from June levels. Approximately 37% of businesses interviewed indicated increased activity in July, down from 42% in the prior month.

CPWM Weekly Market Monitor (2017.07.24)