Telemus Weekly Market Review

November 13 – November 17, 2017

The U.S. equity market ended a busy up and down week little changed, with the benchmark S&P 500 losing just 0.13%. Meanwhile, the Dow dropped 0.3% this week, while the technology heavy Nasdaq outperformed, finishing with a gain of 0.47%.

Investors continued to keep an eye on Capitol Hill, where Republican lawmakers are trying to implement the biggest tax overhaul in more than 30 years. The House passed its version of a tax reform bill on Thursday, while the Senate continued to make changes to its version, which now includes a provision to repeal the Affordable Care Act’s individual mandate.

Retailers dominated this week’s batch of earnings–one of the final batches of the third quarter earnings season. Shares of Wal-Mart jumped 10.9% to a new all-time high on Thursday after the world’s largest retailer reported better-than-expected earnings and revenues for the third quarter and issued upbeat profit guidance for fiscal year 2018. Conversely, shares of Target tumbled 9.9% on Wednesday after the company issued a disappointing earnings forecast for the holiday season.

Ross Stores, Gap, Advance Auto, Foot Locker, Abercrombie & Fitch, Buckle, Shoe Carnival, and Hibbett Sports all soared after beating quarterly profit estimates. Most also beat sales estimates, and many provided upbeat guidance.

Unsurprisingly, the S&P 500’s consumer discretionary and consumer staples sectors, which includes retailers, finished near the top of the week’s sector standings. The telecom services group also outperformed, trimming its November loss.

On the flip side, the energy sector struggled, giving back last week’s advance and then some. The price of crude oil decreased at the beginning of the week–which didn’t bode well for the energy group–but the commodity bounced back on Friday to end the week little changed; West Texas Intermediate crude futures slipped 0.1% to $56.71 per barrel.

Industrial shares also underperformed after General Electric cut its dividend by half and dialed back its profit forecast for 2018. GE shares ended the week lower by 11.1%, extending their year-to-date decline to 42.4%. The S&P 500’s industrial sector lost 1.1% for the week.

In the bond market, U.S. Treasuries moved in a curve-flattening trade, sending the 2yr-10yr spread to its lowest level since 2007. The yield on the benchmark 10-yr Treasury note dropped five basis points to 2.35%, while the 2-yr yield climbed six basis points to 1.72%.

Following this week’s events, investors still strongly believe that the Fed will raise rates next month, with the CME FedWatch Tool placing the chances of a December rate hike at 100.0%.

November 20 – November 24 Economic Calendar

  • Monday
  • Leading Indicators
    10:00 AM ET
  • Redbook
    8:55 AM ET

  • Existing Home Sales
    10:00 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • EIA Natural Gas Report
    12:00 PM ET
  • FOMC Minutes
    2:00 PM ET
  • Tuesday
  • Chicago Fed National Activity Index
    8:30 AM ET
  • Redbook
    8:55 AM ET

  • Existing Home Sales
    10:00 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • EIA Natural Gas Report
    12:00 PM ET
  • FOMC Minutes
    2:00 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Durable Goods Orders
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • EIA Natural Gas Report
    12:00 PM ET
  • FOMC Minutes
    2:00 PM ET
  • Thursday
  • Markets Closed
  • Redbook
    8:55 AM ET

  • Existing Home Sales
    10:00 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • EIA Natural Gas Report
    12:00 PM ET
  • FOMC Minutes
    2:00 PM ET
  • Friday
  • PMI Composite Flash
    9:45 AM ET

  • Baker-Hughes Rig Count
    1:00 PM ET
  • NYSE Early Close
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • EIA Natural Gas Report
    12:00 PM ET
  • FOMC Minutes
    2:00 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.