Markets heated up for a 5th consecutive week. Will the temperature rise from here or start cooling off?
Monday S&P 500 0.77% | NASDAQ 0.87%
Trading resumed on a Federal Bank Holiday and the petal was pushed down further for Monday. There were very few earnings to report on the day but the week ahead is full of additional releases. Most of the increase was momentum driven from the close last Friday.
Tuesday S&P 500 -0.76% | NASDAQ -1.01%
Markets made a U-Turn on the day. Several notable financial services companies released earnings including Goldman Sachs, State Street and Charles Schwab. Revenues for the brokerage giants exceeded expectations as earnings reflect the large inflow into the bigger investment management firms. More bank earnings will help show the credit side of financial services later this week. Tech companies and energy companies felt the brunt of the sell-off on the day.
Wednesday S&P 500 0.47% | NASDAQ 0.28%
Bank earnings contributed positively to the upward swing mid-week as major banks reported healthy earnings for the 3rd quarter. Energy rebounded from their recent fall as focus shifted to statements of Israeli officials on a potential military response in the Middle East.
Thursday S&P 500 -0.02% | NASDAQ 0.04%
Several data releases were made on the day but there wasn’t much budging in markets. The 10-year Treasury yield rose as the job reports show little change in unemployment claims. Between jobs and Retails sales both coming in more positive than expected, markets appeared to shrug off the news. The S&P500 Index exceeded its all-time high on the day.
Friday S&P 500 0.40% | NASDAQ 0.63%
Housing starts and building permits showed signs of slowing while improving GDP estimates brought encouraging news on the day. Gross Production continues to be the leading indicator for arguments projecting the long-sought-after “soft-landing”. Friday ended strong heading into the weekend.
Conclusion S&P 500 0.85% | NASDAQ 0.80%
A fair amount of attention has been paid to regional turmoil this past week but mostly in the energy markets. In U.S. Markets, however, the focus has been on the slew of earnings data. Communication companies, Technology, Utilities and Financial companies have fared very nicely. Further optimism boiled up after sales data came out showing there was stronger spending in September which will likely continue into the Holiday season. Revenue in discretionary spending categories is usually amplified in the last quarter of the year, hence the GDP projections as of late. All in all, except for anticipated volatility around the Presidential Election, markets have positioned themselves strongly heading into the last two months of the year. Markets are anticipating a pullback going into the first week of November as all eyes turn to who will occupy the White House and other elections down the ballot. During the abbreviated season of election outcomes, markets should get back to the fundamentals which is easier said than done.
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