Telemus Weekly Market Review

February 6 – 10

The stock market secured its third consecutive weekly advance with the Dow gaining 0.99%, the Nasdaq 1.19% and the S&P 500 rising 0.81%. The benchmark index posted gains in four of the first six weeks of 2016 while the two down weeks in the middle of January shaved a whopping 0.25% off the index. The industrials, technology and consumer sectors were the standouts, all finishing up over 1%. Energy was the only sector to finish lower.

The first half of the week featured sideways action just below record highs from late January, but the market snapped out of that range on Thursday after comments from President Donald Trump reminded investors that tax reform remains a priority. Mr. Trump announced that something “phenomenal” on the tax front would be announced in the next two or three weeks. The comments, which did not include specific details, were enough to encourage investors, who were starting to worry that a major campaign promise may go unaddressed.

Market participants received another heavy dose of quarterly reports, but the earnings had more influence on individual stocks than the broader market. At the end of the week, more than 71.0% of S&P 500 components had reported their results, generating blended earnings growth of 4.9%, according to FactSet. This represented a modest shortfall relative to the estimate from the end of September, which called for growth of 5.2%. The index is on track for back-to-back quarters of y/y earnings growth for the first time since Q4 2014 and Q1 2015.

The week was quiet on the economic front, leaving investors with just a few second-tier reports to digest. The preliminary reading of the Michigan Sentiment index for February declined to 95.7 from 98.5, almost entirely due to a pullback in the Expectations Index. That index fell to 85.7 from 90.3 while the Current Economic Conditions Index ticked down to 111.2 from 111.3.

Rate hike expectations barely budged on a week-over-week basis. The fed funds futures market ended the week showing a 67.3% implied probability of a rate hike in June, up from last week’s 63.5%, but down slightly from 69.2% two weeks ago. The yield on the benchmark 10-year Treasury note settled at 2.409% on Friday.
Crude oil was unchanged for the week closing Friday at $53.85 despite dropping to as low as $51.36 during the week.

February 6 – 10 Economic Calendar

  • Monday
  • NFIB Small Business Optimism Index
    6:00 AM ET
  • Producer prices
    8:30 AM ET
  • Jeffrey Lacker Speaks
    8:50 AM ET
  • Redbook
    8:55 AM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • Dennis Lockhart Speaks
    12:50 PM ET
  • Robert Kaplan Speaks
    1:00 PM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Eric Rosengren Speaks
    12:00 PM ET
  • Patrick Harker Speaks
    12:45 PM ET
  • Tuesday
  • NFIB Small Business Optimism Index
    6:00 AM ET
  • Producer prices
    8:30 AM ET
  • Jeffrey Lacker Speaks
    8:50 AM ET
  • Redbook
    8:55 AM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • Dennis Lockhart Speaks
    12:50 PM ET
  • Robert Kaplan Speaks
    1:00 PM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Eric Rosengren Speaks
    12:00 PM ET
  • Patrick Harker Speaks
    12:45 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Consumer Price Index
    8:30 AM ET
  • Empire State Mfg Survey
    8:30 AM ET
  • Retail Sales
    8:30 AM ET
  • Industrial Production
    9:15 AM ET
  • Business Inventories
    10:00 AM ET
  • Housing Market Index
    10:00 AM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Eric Rosengren Speaks
    12:00 PM ET
  • Patrick Harker Speaks
    12:45 PM ET
  • Thursday
  • Housing Starts
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Philadelphia Fed Business Outlook Survey
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Eric Rosengren Speaks
    12:00 PM ET
  • Patrick Harker Speaks
    12:45 PM ET
  • Friday
  • E-Commerce Retail Sales
    10:00 AM ET
  • Leading Indicators
    10:00 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Redbook
    8:55 AM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • Dennis Lockhart Speaks
    12:50 PM ET
  • Robert Kaplan Speaks
    1:00 PM ET
  • Janet Yellen Speaks
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Eric Rosengren Speaks
    12:00 PM ET
  • Patrick Harker Speaks
    12:45 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This market 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.