Telemus Weekly Market Review

May 1 – May 5, 2017

Despite the range-bound action, this week will be remembered as a good one for the stock market with the S&P 500 advancing for the fourth week in a row, adding 0.63% as upbeat earnings sentiment remained in focus. The other major indices were up as well with the Dow gaining 0.32% and the Nasdaq 0.88%. Repeating a frequent pattern this year small cap stocks lagged once again with the Russell 2000 index falling 0.25% for the week.

The S&P 500 opened the week by eking out back-to-back wins. Monday’s marginal victory was fueled by the top-weighted technology and financials sectors while Tuesday’s uptick took place despite the lack of sector leadership and crude oil’s 2.5% decline. On the political front, Congress reached an agreement to keep the government funded through September while President Trump reiterated that he might like to break up the nation’s biggest banks.

On Wednesday, the benchmark index registered its first, and only, loss of the week after Apple reported lower than expected iPhone unit sales. However, the tech giant’s upbeat earnings kept losses in check. The FOMC voted to leave the fed funds target range unchanged at 0.75%-1.00%, as expected, with the accompanying policy statement providing little to no new information.

The House of Representatives passed the revised American Health Care Act on Thursday, a big victory for the GOP. However, the bill will face heavy resistance in the Senate, where it can only afford to lose two Republican votes. Crude oil also made headlines Thursday, plunging 4.7% to a five-month low near $45.50/bbl. The tumble was credited to a string of disappointing inventory reports, some weak data out of China, and the deteriorating technical picture for the commodity. Also Thursday marked the seventh straight session in which the S&P finished up or down less than 0.2%.

Buyers were intrigued by Friday’s better than expected Employment Situation Report for April, however, gains were capped once again ahead of the final round of the French presidential election, which will take place on Sunday. Polls suggest that Emmanuel Macron will easily defeat his rival Marine Le Pen, which has been construed as a positive for global equity markets given Ms. Le Pen’s anti-EU rhetoric. France’s CAC ended the week at its highest level in over ten years.

The fed funds futures market still points to the June FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 83.1%, up from last week’s 66.6%. The 10 year U.S. Treasury note closed at 2.35%, up 7 basis points from last Friday with most of the rise in yields coming early in the week.

Crude oil as mentioned above had a rough day on Thursday and closed down over 5.5% for the week to $46.47 its lowest close in over 5 months. Concern over U.S. supply and the continuation of OPEC production cuts put pressure on prices.

May 8 – 12 Economic Calendar

  • Monday
  • James Bullard Speaks
    8:35 AM ET
  • Loretta Mester Speaks
    8:45 AM ET
  • Labor Market Conditions Index
    10:00 AM ET
  • TD Ameritrade IMX
    12:30 PM ET
  • Eric Rosengren Speaks
    1:00 PM ET
  • Robert Kaplan Speaks
    4:15 PM ET
  • Money Supply
    4:30 PM ET
  • Tuesday
  • NFIB Small Business Optimism Index
    6:00 AM ET

  • Redbook
    8:55 AM ET
  • JOLTS
    10:00 AM ET
  • Wholesale Trade
    10:00 AM ET
  • Eric Rosengren Speaks
    1:00 PM ET
  • Robert Kaplan Speaks
    4:15 PM ET
  • Money Supply
    4:30 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Import and Export Prices
    8:30 AM ET
  • Atlanta Fed Business Inflation Expectations
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Eric Rosengren Speaks
    12:00 PM ET
  • Treasury Budget
    2:00 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • William Dudley Speaks
    6:25 AM ET

  • Jobless Claims
    8:30 AM ET
  • PPI-FD
    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
  • Friday
  • Consumer Price Index
    8:30 AM ET

  • Retail Sales
    8:30 AM ET
  • Charles Evans Speaks
    9:00 AM ET
  • Business Inventories
    10:00 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • Patrick T. Harker Speaks
    12:30 PM ET
  • Baker-Hughes Rig Count
    1:00 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.