Telemus Weekly Market Review

July 23 – July 27, 2018

The markets moved mostly higher last week with investors focusing on a potential U.S. – EU trade deal and the latest batch of Q2 earnings, which featured results from high flying tech names Facebook, Amazon, and Alphabet (Google). For the week the S&P 500 advanced 0.61%, and the Dow Jones Industrial Average climbed 1.57%. The tech-heavy Nasdaq fell, losing 1.06%, due in large part to Facebook’s 19% plunge on Thursday which marked the biggest one day drop ever in market value for a U.S. listed company.

Facebook tumbled in response to its Q2 earnings report, which showed below consensus revenues and slowing user growth following the Cambridge Analytica data scandal. In addition the social media giant issued disappointing revenue guidance. However, Google’s parent company Alphabet and internet giant Amazon came to the rescue by reporting better than expected results.

Despite that the top weighted technology sector was the worst performing group last week, diving 1.2%. Conversely, financials were among the top-performing sectors with a gain of 2.0%, benefiting from a rise in interest rates as the yield on the benchmark 10-yr Treasury note climbed six basis points to 2.96%.

On the data front, the preliminary reading for second quarter GDP showed an annualized increase of 4.1%, in line the best reading since the third quarter of 2014. Consumer spending was the main engine of growth, increasing 4.0% and contributing 2.69 percentage points.

In politics, President Trump met with European Commission President Jean-Claude Juncker at the White House on Wednesday. Stocks spiked that afternoon on headlines that Mr. Trump had secured trade concessions from the EU, including a pledge to import more soybeans and natural gas from the U.S. and to improve market access for U.S. medical devices. The two sides also decided to table auto tariffs while they continue to negotiate.

The European Central Bank decided on Thursday to keep its key policy rate unchanged, as expected, and reiterated that net asset purchases will likely cease at the end of December, with the reinvestment of principal payments continuing for an extended period of time thereafter.

Crude oil ended the week at $69.04 in Nymex trading.

Looking ahead, the Federal Reserve will release its latest policy directive on Wednesday. The market isn’t expecting a rate hike, but investors will be interested to see what the central bank has to say about future rate increases this year; currently, the market is anticipating two additional hikes by year’s end.

July 30 – August 3 Economic Calendar

  • Monday
  • Chicago Fed Pending Home Sales Index
    10:00 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • Farm Prices
    3:00 PM 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
  • FOMC Meeting Announcement
    2:00 PM ET
  • Tuesday
  • Personal Income and Outlays
    8:30 AM ET

  • 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
  • FOMC Meeting Announcement
    2:00 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
  • Thursday
  • Challenger Job-Cut Report
    7:30 AM ET

  • Jobless Claims
    8:30 AM ET
  • Factory Orders
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • Friday
  • Employment Situation
    8:30 AM ET

  • International Trade
    8:30 AM ET
  • PMI Services Index
    9:45 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Consumer Confidence
    10:00 AM ET
  • State Street Investor Confidence Index
    10:00 AM ET
  • FOMC Meeting Announcement
    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.