October 17th – Weekly Update

  • Political controversy and interest rate speculation left U.S. equities slightly lower at the end of the week with the Nasdaq, Dow Jones and S&P 500 all losing ground. Oil and gold were both relatively flat for the period. The 10-year U.S. Treasury yield finished up at approximately 1.8%.
  • With 7% of S&P 500 companies having reported first quarter results, 76% have beaten earnings expectations while 62% have beaten sales expectations. According to FactSet, the third quarter blended earnings decline stands at -1.8%, a better start than seen in recent quarters. If the index reports negative earnings growth for the quarter, it will mark the first time the index has recorded six consecutive quarters of year-over-year declines in earnings since FactSet began tracking the data in Q3 2008.
  • The minutes of the FOMC’s September 21 meeting revealed that participants generally agreed economic activity had picked up, making a “reasonable argument” for an immediate rate hike or a continued delay. However, many expressed the view that it would be appropriate to await further evidence of continued progress towards the Committee’s objectives.
  • Advanced U.S. retail sales rose 0.6% in September compared to August. Auto sales were up 1.1% after declining 0.3% during the same period, respectively.
  • U.S. consumer confidence was flat in October according to the Bloomberg Consumer Confidence Index which came in at 42.1 for the month, not far off from September’s measurement of 41.4. The Labor Department stated that jobless claims were unchanged week-over-week coming in at 246,000.
  • Higher U.S. fuel prices resulted in a slight import cost increase of 0.1% in September following a 0.2% decline in August. Exports costs dropped 0.8% in August and rose 0.3% in September.
  • The Royal Institution of Chartered Surveyors reported that demand for residential properties in the U.K. rose in September for the first time in seven months.
  • Global growth concerns flared as China reported a decrease in its trade surplus, which dropped from approximately $59.6 billion in September 2015 compared to $41.99 billion in September 2016. Chinese exports declined 10% year-over-year.

cpwm-weekly-market-monitor-2016-10-17