Telemus Weekly Market Review

October 23 – October 27, 2017

Stocks began the week on a lower note as investors cashed in on last week’s record highs, but reclaimed their losses on Friday, thanks to an impressive batch of earnings. The major indices finished the week in positive territory, with the Nasdaq, the Dow, and the S&P 500 adding 1.09%, 0.45%, and 0.23%, respectively. The S&P 500 and the Nasdaq both settled Friday at new all-time highs.

The S&P 500’s technology sector kept the broader market afloat with little help from its peers, easily settling at the top of the sector standings. The group was underpinned by Microsoft, Alphabet, and Intel, which added between 4.8% and 7.4% on Friday after reporting better-than-expected earnings and revenues for the third quarter. Amazon also surged on Friday, jumping 13.2%, after beating both top and bottom line estimates. The company’s positive performance boosted the consumer discretionary sector, which finished the week with a gain of 1.1%.

On the downside, the health care sector struggled this week, with biotechnology names leading the retreat. Celgene showed particular weakness, ending the week lower by 19.1%, after missing revenue estimates for the third quarter and lowering its 2020 long-term financial targets on Thursday.

The consumer staples sector also lagged, moving lower by 1.5%. Within the group, CVS Health plunged 9.8% following unconfirmed reports that the pharmacy retailer has made an offer to acquire managed health care company Aetna for more than $200 per share. Aetna shares ended the week higher by 7.6%.

On the data front, the advance GDP report on Friday showed that the U.S. economy increased at annual rate of 3.0% in the third quarter, marking the second straight quarter the annualized rate has been 3.0% or higher. However, the headline number was inflated by a change in inventories, while real final sales decelerated to 2.3% from 2.9% in Q2. In other words, the U.S. economy is proceeding largely at the same ho-hum pace.

Elsewhere, speculation as to who will become the next Fed Chair continued this week, and it appears increasingly likely that current Fed Chair Janet Yellen will be replaced by either Fed Governor Jerome Powell or Stanford University economist John Taylor. Bloomberg reported on Friday that President Trump is leaning toward Mr. Powell.
Following this week’s events, the CME FedWatch Tool places the chances of a December rate hike at 99.9%, up from 93.1% last week. The 10 year U.S. Treasury note finished the week at 2.41% after spiking as high as 2.48% on Friday.

Crude oil closed Friday at $54.19 a gain of slightly more than 4% for the week.

October 30 – November 3 Economic Calendar

  • Monday
  • Personal Income and Outlays
    8:30 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • Farm Prices
    3:00 PM ET
  • Chicago PMI
    9:45 AM ET
  • Consumer Confidence
    10:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • Raphael Bostic Speaks
    6:15 PM ET
  • Tuesday
  • Employment Cost Index
    8:30 AM ET

  • Redbook
    8:55 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • Chicago PMI
    9:45 AM ET
  • Consumer Confidence
    10:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • Raphael Bostic Speaks
    6:15 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • ADP Employment Report
    8:15 AM ET
  • Treasury Refunding Announcement
    8:30 AM ET
  • PMI Manufacturing Index
    9:45 AM ET
  • ISM Mfg Index
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • Raphael Bostic Speaks
    6:15 PM ET
  • Thursday
  • Challenger Job-Cut Report
    7:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Productivity and Costs
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • William Dudley Speaks
    12:20 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Raphael Bostic Speaks
    6:15 PM ET
  • Friday
  • Employment Situation
    8:30 AM ET

  • International Trade
    8:30 AM ET
  • PMI Services Index
    9:45 AM ET
  • Factory Orders
    10:00 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • Neel Kashkari Speaks
    12:15 PM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • Raphael Bostic Speaks
    6:15 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.