Telemus Weekly Market Review

July 17 – July 21, 2017 

Equities kept chugging along this week, helped by a generally solid batch of earnings reports and the notion that monetary policy will remain accommodative for the foreseeable future. The S&P 500 ended the week higher, adding 0.54%, but the real star was the Nasdaq, which climbed 1.19% and settled at a new record high for three sessions in a row. The Dow lagged this week, surprisingly finishing with a small loss of 0.27%.

The stock market kicked off the week with a rather uneventful performance on Monday that left the major averages little changed. However, activity picked up on Tuesday as the Nasdaq climbed to a new record high for the first time since June 8. Netflix headlined the earnings news, surging 13.5%, after adding a surprisingly-large number of new subscribers in the second quarter.

Buyers were in the driver’s seat during the midweek session, pushing the Nasdaq, the S&P 500, the Dow, and the small-cap Russell 2000 to new all-time highs. Each of the S&P 500’s 11 sectors finished in the green with the energy group setting the pace following an upbeat EIA crude inventory report. Conversely, financials and transports struggled once again, shrugging off some relatively upbeat earnings reports.

However, it’s important to note that the S&P 500’s financial sector and the Dow Jones Transportation Average both had bullish, multi-week runs ahead of earnings season, making it difficult for their components to advance on upbeat results alone.

On Thursday, monetary policy was the focal point as investors digested the latest policy decisions from the European Central Bank and the Bank of Japan. Both central banks decided to leave interest rates unchanged and sounded dovish about future accommodation. However, the euro rallied against the U.S. dollar nonetheless as ECB President Mario Draghi failed to dispel the notion that the ECB might soon announce a tapering of its asset purchase program. Year to date the Euro has now rallied almost 9% against the greenback.

The Nasdaq eked out another record close, extending its winning streak to ten sessions in a row, while the S&P 500 and the Dow finished just shy of their unchanged marks. The telecom services sector was the top-performing group–which has been a rarity this year–following an upbeat earnings report from T-Mobile US. However, ironically, T-Mobile shares finished solidly lower.

Equity indices ended the week with small losses on Friday. General Electric weighed on the industrial sector, dropping 2.9%, after reporting disappointing organic revenue growth for its industrial segment in departing CEO Jeffrey Immelt’s last earning call. Microsoft also faced selling pressure as its better than expected earnings and revenues failed to fully justify its preceding ten-day rally. Energy was the worst-performing sector following news of increased OPEC production, which sent crude oil on a 2.7% plunge for the day.

The fed funds futures market still points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 52.0%, up slightly from last week’s 50.6%. The Fed will release its latest policy statement on Wednesday afternoon at 14:00 ET. The 10 year U.S. Treasury note closed at 2.23% on Friday a drop of almost 9 basis points for the week.

Crude oil closed at $45.60 in NYMEX trading on Friday posting a small loss for the week after several weeks of gains.

July 24 – July 31 Economic Calendar

  • Monday
  • PMI Composite Flash
    9:45 AM ET
  • Existing Home Sales
    10:00 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Richmond Fed Manufacturing Index
    10:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • Kansas City Fed Manufacturing Index
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Tuesday
  • Redbook
    8:55 AM ET

  • FHFA House Price Index
    9:00 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Richmond Fed Manufacturing Index
    10:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • Kansas City Fed Manufacturing Index
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • New Home Sales
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • Richmond Fed Manufacturing Index
    10:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • Kansas City Fed Manufacturing Index
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • Durable Goods Orders
    8:30 AM ET

  • International Trade in Goods
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Chicago Fed National Activity Index
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 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
  • GDP
    8:30 AM ET

  • Employment Cost Index
    8:30 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Neel Kashkari Speaks
    1:20 PM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • Kansas City Fed Manufacturing Index
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 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.