October 21 - October 25 Week in Review

Wall St. was back to its winning ways last week as investors were generally pleased with the latest round of corporate earnings reports. The S&P 500 advanced for the third straight week, rising 1.2% and nearly setting new record highs in the process. The other major indices rallied as well with the Dow Jones Industrial Average gaining 0.7%, the Nasdaq Composite 1.9%, and the Russell 2000 1.5%.

The value oriented S&P 500 energy sector was the week's outright performance leader, with oil prices climbing 5% last week. The information technology, industrials, and financials sectors followed suit, while the real estate and consumer discretionary sectors were laggards.

12 of the 30 Dow components reported earnings. Investors gave a nod of approval to Procter & Gamble, United Technologies, Caterpillar, Boeing, Microsoft, Dow Inc., Visa, and Intel. Conversely, McDonald's, 3M, Travelers, and Verizon failed to stir much enthusiasm following their results.

The market seemed to find the good in the bad last week. A better than feared outlook for the return of Boeing's 737 MAX helped investors set aside its earnings miss and prior analyst downgrades. Similarly, positive results and upbeat guidance from Lam Research and Intel outweighed negative ones from Texas Instruments. Caterpillar didn't even need a reason to rally soon after reporting disappointing results and guidance. After the close Thursday Amazon reported results, missing profit estimates and providing a cautious outlook for the important holiday quarter. The stock opened sharply lower on Friday but shares were able recover nicely by the end of the day.

On Friday, after all the earnings reports were released for the week, the S&P500 was less than one point from its intraday high of 3027.98. The mood was helped by the USTR office saying it was close to finalizing some sections of a "Phase One" trade deal with China.

Despite no real news last week Apple quietly rose 4.3% as analysts continued to increase their price targets for the stock. Apple will report quarterly results this week.

Separately, Biogen surprised investors by saying it will seek FDA approval for its Alzheimer's drug in 2020 after it had renounced the treatment in March. Tesla reported better than expected numbers. Nike and Under Armour announced on the same day that their CEOs will be stepping down from the helm next year.
The China news sent interest rates higher after a relatively quiet week. The 2 year Treasury closed at 1.64% and the 10 year Treasury closed at 1.80%. In other markets WTI crude closed at $56.44 and the U.S. Dollar index closed at 97.83%.

October 28 – November 1 Economic Calendar

  • Monday
  • International Trade in Goods
    8:30 AM ET

  •   Chicago Fed National Activity Index
    8:30 AM ET  
  • Retail Inventories [Advance]
    8:30 AM ET
  • Wholesale Inventories [Advance]
    8:30 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • Tuesday
  • FOMC Meeting Begins 
  • Redbook
    8:55 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Pending Home Sales Index
    10:00 AM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • ADP Employment Report
    8:15 AM ET
  • GDP
    8:30 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Survey of Business Uncertainty
    11:00 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Thursday
  • Challenger Job-Cut Report
    7:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Personal Income and Outlays
    8:30 AM ET
  • Employment Cost Index
    8:30 AM ET
  • Chicago PMI
    9:45 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Farm Prices
    3:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • Employment Situation
      8:30 AM ET
    • PMI Manufacturing Index
      9:45 AM ET
    • ISM Mfg Index
      10:00 AM ET
    • Construction Spending
      10:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET

 

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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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