This past week represented so many of the weeks of 2017; slow action with a bit of an upward skew. Monday, Tuesday, Thursday were sleeping – and minor gains Wednesday were offset by small losses Friday; in the end we had small gains for the week! Rinse, wash, repeat. For the week the S&P 500 added 0.5% and the NASDAQ 1.2%. Sixty eight S&P 500 companies reported earnings this past week so that was the focus.
Fun fact: Until Friday’s loss, the NASDAQ had a 10 day string of gains, matching its longest streak since Feb. 24, 2015.
The European Central Bank left key rates unchanged, but President Mario Draghi was vague about future asset purchases, stressing a tightening of financial conditions due to the euro’s recent appreciation.
Economic news state side was not really market moving but it is worth noting China beat forecasts with 6.9% second-quarter growth.
Here is the 5 day weekly “intraday” chart of the S&P 500 .. via Jill Mislinski. (Friday is missing but the S&P 500 slid a tiny bit on the day)
Quite a turnaround from the post November move on “Trump = strong dollar” theory.
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The week ahead…
More S&P 500 type earnings coming this week. The Fed will also meet and make an announcement Wednesday but no one expects action and “dovish Yellen” made her appearance on Capitol Hill 2 weeks ago so everything is back to normal there.
Nearly 200 companies on the S&P 500 are expected to report in the coming week. These include Google’s parent Alphanet (GOOGL), Facebook (FB), Amazon (AMZN), Intel (INTC), and Exxon (XOM).
Earnings for the S&P 500 are tracking at an estimated 7.2% growth for the second quarter with about 20% of companies having already reported. That figure, however, can be a little misleading given that energy earnings are expected to rise more than 300% from the year-ago quarter. Only the tech sector and the financials sector are expected to post double-digit profit growth with gains of 10.4% and 10.1%, respectively.
Speaking of Google, we may finally see YouTube’s economic impact.
Economic news in the U.S. will be light and non essential.
Short term: The breakouts in the 2 major indexes held steady. Some catching up of the moving averages are probably in order…
The Russell 2000 finally emerged from the “Big Yellow Range ™” and stayed emerged. However Friday was an interesting day as we had an “outside reversal day” where the index moved higher than the prior day’s high and prior day’s low intraday day AND closed below the prior day’s low. When that happened in the NASDAQ in early June it led to a few weeks of weakness.
The NYSE McClellan Oscillator stayed solidly in the black all week which is a good sign.
Long term: Here are 5 year charts on the major indexes; for “non trader types” this is all gravy.
Charts of interest / Big Movers:
Monday, shares of Blue Apron (APRN) tumbled more than 10% after Amazon.com (AMZN) filed a trademark for a meal kit service, suggesting the newly public company could face competition from the retail giant.
Netflix (NFLX) was the star Tuesday as jumped 14% after the streaming giant late Monday posted larger-than-expected growth in subscribers while reporting quarterly earnings.
The company announced that it now has more subscribers outside the U.S. than within after adding 1.1 million domestic subscribers and 4.1 million international customers. Netflix also forecast that its international segment would show a profit in the third quarter and for the full year at current exchange rates, which would be a first for the company. This is big news for Netflix, which has shown a loss for its international operations every quarter but one — the first quarter of 2017 — since it began streaming internationally in Canada in September 2010.
Another bomb of a week for Chipotle Mexican Grill (CMG) after the company confirmed several customers fell ill after eating at one of its restaurants in Virginia.
Wednesday, Vertex Pharma (VRTX) soared 21% to close at an all-time high of $159.76 a day after the drug company late Tuesday announced positive results from clinical studies of its cystic fibrosis treatments.
Thursday, Home Depot (HD) fell 4.1%, its worst trading day since January 2016, on news that Sears Holdings (SHLD) Sears Holdings Corp. SHLD, -8.02% will sell Kenmore-branded appliances through…. wait for it… Amazon.
Lowe’s (LOW) didn’t like that news either.
Have a great week and we’ll see you back here Sunday!