October 14 - October 18 Week in Review

It was a mixed week for the U.S. equity markets last week. The S&P 500 gained 0.5%, the Nasdaq rose 0.4% and the Russell 2000 rose 1.6% as the first busy week of earnings reports for the third quarter was generally viewed as better than feared. Only the Dow Jones Industrial fell, losing 0.2%, giving up its weekly advance on Friday after shares of Johnson & Johnson and Boeing lost over 6% apiece on negative news reports.

Video 10.21.2019

Seven of the 11 S&P 500 sectors finished in positive territory, with health care, real estate, and financials advancing the most.

The financial sector was helped by upbeat earnings results from JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup among others. The Dow Jones Transport did well too. Positive reactions to results from United Airlines, J.B. Hunt Transport Services, CSX, and KC Southern accounted for the out-performance.

The health care space not only benefited from an earnings driven gain in industry giant UnitedHealth but also by news that a $50 billion package offered by five companies, including Johnson & Johnson & Teva, could settle the opioid lawsuits.

Johnson & Johnson also beat earnings expectations but its subsequent drop on Friday followed news that it recalled 33,000 bottles of baby power for traces of asbestos. Boeing took a hit after Reuters reported that the company may have misled the FAA about the safety of its 737 MAX based on instant messages between two employees in 2016.

The energy sector was last week's laggard, followed by information technology led by a revenue miss from IBM and possibly some de-risking efforts.

As to the economy economic data wasn't too positive last week helping to strengthen expectations for a Fed rate cut at the October FOMC meeting. Most notably, U.S. retail sales unexpectedly declined 0.3% in September. Adding to the muted outlook was news that China's Q3 GDP, reportedly up 6.0%, grew at its slowest year over year pace in over 27 years.

The U.S. Treasury market was relatively quiet last week, with investors perhaps waiting for the outcome of Saturday's Brexit vote in Parliament. The 2 year yield declined three basis points to 1.57% and the 10 year yield was unchanged at 1.75%.

In other markets the U.S. Dollar Index fell 1.1% to 97.26 and WTI crude fell 1.8% to close at $53.76 a barrel.

October 21 – October 25 Economic Calendar

  • Monday

  • Tuesday
  • Redbook
    8:55 AM ET
  • Existing Home Sales
    10:00 AM ET
  • Richmond Fed Manufacturing Index
    10:00 AM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • FHFA House Price Index
    9:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Thursday
  • Durable Goods Orders
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • PMI Composite FLASH
    9:45 AM ET
  • New Home Sales
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Kansas City Fed Manufacturing Index
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • Consumer Sentiment
      10:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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