Weekly Economic Summary - 7/24/2017Submitted by Miller Financial Group, LLC on July 24th, 2017
U.S. stocks are off to a sluggish start this morning ahead of a busy week of market moving events. In early trading this morning, both the Dow and S&P 500 are off 0.3% and 0.16% respectively while the tech heavy Nasdaq is flat.
Last week, the S&P500 and Nasdaq extended gains for a third week, while the broader market retreated on Friday after some disappointing earnings reports. For the week, the Dow was 0.3% lower while the S&P500 was up 0.5% and the Nasdaq added 1.2%. Friday marked the end of the Nasdaq’s 10 session winning streak, which matched the benchmark’s longest streak since February 2015.
Earnings will be the big focus for investors this week with nearly 200 S&P500 companies set to report. Tech giants Alphabet (Google), Facebook and Amazon will garner the lion’s share of investors’ attention with reports due this week. Overall, second quarter earnings reports have been positive, with 68% of companies beating earnings per share numbers thus far, while 75% have beat sales expectations and 53% of companies reporting have exceeded both sales and earnings expectations.
Earnings won’t be the only story driving the markets this week. The Federal Open Market Committee meets Tuesday and Wednesday. Most experts believe that the Fed won’t raise interest rates after this meeting but extra attention will be paid to see if there will be any insight shed on the balance sheet normalization plan. Also, on the calendar is an OPEC/non-OPEC ministers meeting to discuss compliance and production matters. Oil prices are up 1% this morning following news that Nigeria will limit its production to 1.8 million barrels per day. The economic calendar is a busy one this week with reports on housing conditions and the advance estimate on Q2 GDP growth.
On the political front, health care remains the focus on Capitol Hill. Republicans were forced to shelve a bill to repeal and replace the Affordable Care Act due to lack of support last week. The inability of the Trump Administration to move the health care plan forward continues to be a concern for investors as they await Trump’s more market-friendly tax reform and infrastructure plans.
Have a great week and enjoy this beautiful Northwest summer weather!