November 14th – Weekly Update

  • In Brexit-like fashion, Donald Trump won the presidential election in a landslide. The Dow shook off its initial plunge to have the best week in five years while the S&P500 and NASDAQ each gained over 3%. Oil lost ground as expectations of a production halt lessened and gold dropped to a four week low. The 10-year U.S. Treasury yield closed at approximately 2.2%.
  • With 91% of S&P 500 companies having reported first quarter results, 71% have beaten earnings expectations while 55% have beaten sales expectations. According to FactSet, the third quarter blended earnings growth rate for the S&P 500 is 2.9%. If the index reports growth in earnings for the quarter, it will mark the first time the index has seen year-over-year growth in earnings since Q1 2015. Biogen, Priceline and Kohl’s impressed this week while Twitter, SunPower Corp. and Hertz Rental Car were among the disappointments.
  • Republican nominee Donald Trump won more than the required 270 Electoral College votes needed to become president-elect. At the moment, this will likely cause indigestion in financial markets, as a Republican win was largely unanticipated by many of the mainstream media and polls.
  • The preliminary University of Michigan consumer sentiment reading for November came in at 91.6, ahead of the 87.5 consensus and up from 87.2 in October. The survey claims that the rise was driven by an improved outlook for the U.S. economy.
  • According to the JOLTS report, there were approximately 5.49M job openings across the U.S. in September, little changed from 5.45M in August but above the 5.40M consensus expectation. The September job openings rate was 3.7% vs 3.6% in August.
  • China’s trade surplus was lower than expected, largely due to export weakness. The October 2016 trade surplus was $49.1B, compared to $61.3B a year earlier and below the $51.7B forecast. Exports were down 7.7% year-over-year, worse than the forecasted 6% decline. Imports fell 1.4% year-over-year, compared to an expected 1% drop.
  • There was notable improvement in European investing sentiment with the Sentix Investor Confidence index rising from 8.5 in October to 13.1 in November, far above the forecasted 9.0.

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