Month: July 2017

Financials, healthcare and industrials pushed the Dow Jones Industrial Average to another new all-time high on Monday.

Consumer spending, factory orders, construction spending and trade deficit data for June will be released this week. Third-quarter manufacturing and service PMIs from Markit and ISM will also be out over the coming days. Economists anticipate small dips in those surveys. July auto sales are expected to reflect an annualized rise to 16.9 million, up 0.5 million from June. The July employment report will close the week on Friday. The consensus estimate calls for 180,000 new jobs in July and a 0.1-percent drop in the unemployment rate to 4.3 percent.

China’s manufacturing PMI slowed in July, but remained above 50, signaling continued expansion. Headline Eurozone inflation matched expectations in July and core CPI was 0.1 percent higher than estimates. The euro gained versus the greenback on the news. The U.S. Dollar Index is flirting with the 93 level and could test its multi-year low this week. On Tuesday, the Eurozone will report second-quarter GDP growth. Economists forecast growth of 2.4 percent year-on-year and 0.6 percent quarter-on-quarter.

Oil prices climbed near $50 a barrel on rumors of U.S. sanctions against Venezuela’s state-owned oil company following a power grab by the country’s president. Venezuela imports U.S. oil and mixes it with their heavier product to create a mixture suitable for refineries in Asia. The U.S. is also a major importer of Venezuelan heavy crude.

The threat of sanctions has also shifted U.S. importers towards lighter crude produced domestically and heavy crude from Canada. Although traders may push domestic oil prices higher in the short-term, a sustained rise in prices looks unlikely given the preparations by U.S. firms.

Apple (AAPL) will report earnings after the bell on Tuesday. Analysts forecast $1.57 per-share, though the whisper number is slightly higher at $1.61 per-share. Over the past four quarters, Apple beat earnings by 2.9, 0.6, 4.7 and 4.0 percent, an average of 3.1 percent. Apple is the largest company in the stock market. It makes up 14.6 percent of SPDR Technology (XLK), 11.5 percent of PowerShares QQQ (QQQ), 4.7 percent of SPDR DJIA (DIA) and 3.7 percent of SPDR S&P 500 (SPY). Pfizer (PFE), BP plc (BP) and Sony (SNE) will also report on Tuesday.

On Wednesday, MetLife (MET), Prudential (PRU) American International Group (AIG), Time Warner (YWX), Mondelez (MDLZ) and Tesla (TSLA) will report.

Kraft Heinz (KHC), Allergan (AGN), Enbridge (ENB), Duke Energy (DUK), Regeneron (REGN) and Aetna (AET) will deliver results on Thursday. Friday will be relatively light in terms of market capitalizations. The largest firm reporting will be $44-billion Cigna (CI).

Equities climbed to new all-time highs and the Dow Jones Industrial Average rose 1.16 percent on the week. A dip in technology shares on Thursday and Friday left the Nasdaq down 0.20 percent for the week. The S&P 500 and Russell 2000 also had small declines.

Comcast (CMCSA), Proctor & Gamble (PG), Intel (INTC), Dow Chemical (DOW), Mastercard (MA), Bristol-Myers (BMY), Facebook (FB), Coca-Cola (KO), Boeing (BA), Paypal (PYPL), Gilead Sciences (GILD), Ford (F), Advanced Micro Devices (AMD), Amgen (AMGN), Alphabet (GOOGL) and United Parcel Service (UPS) all beat earnings estimates.

Amazon (AMZN) earnings per share were 71 percent below expectations, however, sending shares down 5.8 percent from Thursday’s high to Friday’s close. SPDR Consumer Discretionary (XLY) gained 0.30 percent on the week, despite its heavy AMZN weighting.

Tobacco stocks pulled consumer funds lower on Friday after the Food & Drug Administration (FDA) said it would reduce the amount of nicotine in cigarettes to non-addictive levels. Shares of Altria (MO) fell as much as 18 percent before rebounding. SPDR Consumer Staples (XLP) was down 2.22 percent at the low, before finishing the day down 0.83 percent.

Durable goods orders rose 6.5 percent in June, faster than expected and far higher than May’s 0.1-percent decline. Weekly unemployment claims remain near four-decade lows at 244,000. New home sales hit an annualized pace of 610,000 in June, up from May’s 605,000, while existing home sales slowed by 0.1 million to 5.52 million in June.

West Texas Intermediate crude climbed to near $50 a barrel. A larger-than-expected decline in crude oil inventory pushed prices higher. SPDR Energy (XLE) increased 2.10 percent on the week.

Second-quarter GDP increased by 2.6 percent, much higher than the first quarter’s 1.2 percent growth.

The Conference Board’s consumer confidence survey jumped to 121.1 in July, while the University of Michigan’s dipped slightly. Both numbers, however, beat forecasts.

All four of the major indexes have hit new all-time highs over the past week.

Strong earnings reports across all sectors have contributed to market strength. Amgen (AMGN) and Coca-Cola (KO) recently beat earnings, lifting biotechnology and consumer staples sectors.

As of last Friday, the blended estimate for S&P 500 earnings growth this quarter was 7.2 percent, up from 6.6 percent on June 30.

Financials jumped on Tuesday following a sharp rebound in the 10-year yield.

Smaller and regional banks enjoyed the greatest gains and SPDR Financials (XLF) hit a new 52-week high.

SPDR S&P Insurance (KIE) and iShares U.S. Broker Dealers (IAI) are up double digits year-to-date. Banks have seen less dramatic gains, but are poised to catch up as long-term interest rates rebound.

Investment-grade, corporate and government bonds slipped in response to rising interest rates, while high-yield bonds and floating-rate funds prospered.

Floating-rate funds moved higher following the latest jump in interest rates.

The U.S. Dollar Index remains in a trading range and could test its multi-year low below 93. A rebound appears likely, however, given the build-up in bearish sentiment.

SPDR Energy (XLE), Energy Services (XES), and Exploration & Production (XOP) had been repelled by their 50-day moving average for much of 2017, but XLE and XOP broke above this week. First Trust ISE-Revere Natural Gas (FCG) has also shown a similar pattern. Crude oil, however, doesn’t look as bullish.

Some materials sectors have improved in recent weeks. Copper is approaching $3 per pound and coal stocks are nearing their 52-week high.

The Senate voted to move forward on a repeal of the Affordable Care Act on Tuesday. The bill allows the Senate to move into conference with the House to produce a final bill. Healthcare stocks remain near all-time highs.