Markets moved higher this week as they lean into earnings season. Will equities win out as markets continue to balance the risks?
Monday
S&P 500 1.07% | NASDAQ 1.37%
Markets picked up where they left off from last week. The S&P500, Nasdaq, and Dow Jones Industrial all rose a full percentage point or more. The broad rally came after reports of near-term solutions with China and the government shutdown.
Tuesday
S&P 500 0.00% | NASDAQ 0.16%
Markets were virtually flat for most of trading on the day aside from the Dow Jones. Corporate earnings continue to roll in, and Blue Chips went on a rally as a result. Precious metals (gold and silver) fell significantly lower after recent record gains.
Wednesday
S&P 500 0.53% | NASDAQ 0.93%
The tech sector pulled markets down as Netflix (NFLX) earnings disappointed along with AT&T (T). Chances of sudden swings do increase in earnings season as investors are looking at the balance of risks. The Volatility Index (VIX) rose above 20, which was a bit elevated after 3 days of calm.
Thursday
S&P 500 0.58% | NASDAQ 0.89%
Earnings continue to prop up markets as equities remain strong. Positive news for sellers as existing home sales rose in September. Rates for a 30-year mortgage saw over a .25% fall last month.
Friday
S&P 500 0.79% | NASDAQ 1.15%
Friday trading concluded on a high as markets continued to wait for news on the shutdown and trade negotiations. The Consumer Price Index (CPI) showed essentially no change in September. All eyes will be on the Federal Reserve next week on the direction of interest policy.
Conclusion
S&P 500 1.92% | NASDAQ 2.31%
This week was filled with corporate earnings announcements and markets, overall, liked what it saw. Equity markets continue to climb and the 10-year treasury fell below 4% in October. Safe-haven assets, like gold, have had their time in the sun but fell lower on the week. Bets are on a sustained run, barring speed bumps with fiscal policy or an increase in corporate layoffs and inflation. Investors are balancing risks in a time where monetary policy (interest rates) is going to change the borrowing landscape. As interest rates move lower, consumers and companies will look to get rid of higher interest debts and refinance. Less interest expense costs for households and companies can be a signal of more spending down the road.
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