Weekly Economic Summary - 5/14/2018Submitted by Miller Financial Group, LLC on May 14th, 2018
Easing tensions over the trade talks between U.S. and China have investors responding positively to the equity markets. Stocks are up today following a strong performance last week. If this trend continues, a positive close today would be the eighth straight advance for the Dow. Last week, the Dow rose 2.3%, the S&P500 was up 2.4% and the Nasdaq climbed 2.7%.
Investors seem to be responding positively to a tweet from President Trump that he and Chinese President Xi are working to get Chinese telecom firm ZTE back into business and that the Commerce Department has been instructed to “get it done.” Concerns about the trade war have kept the lid on the markets the past few weeks and this tweet combined with progress in talks between the U.S. and China seem to be fueling this rally.
Other factors contributing to the sustained uptick in equities are an earnings season that has been one of the best in years. So far the majority of the S&P500 companies have reported and as a whole are showing a 24.5% growth from the same period a year ago with 9.3% growth in revenues. Almost 78% of those companies beat earnings per share estimates, while 75% beat revenue estimates. A pullback in bond yields and a weaker dollar are also providing a tailwind for stocks.
It is a quiet day on the economic calendar with key reports on April Retail Sales due out on Tuesday and Housing Starts and Industrial Production Reports scheduled for Wednesday. European stocks are lower over concerns about political developments in Italy while most Asian indices are positive.
Hope you are enjoying this great weather we are having here in the Northwest!