Market Update: Friday, July 21, 2017

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Yesterday’s Market Activity

  • Nasdaq (+0.1%) up again, as the tech heavy index gained for 10th consecutive day to post fresh record high along the way.
  • Dow (-0.1%), S&P 500 (-0.1%) down slightly.
  • Sectors split as rate-sensitive telecom, utilizes lead, consumer staples, materials lagged
  • European stocks -0.4% after ECB meeting, but euro rallied 1.0%.
  • US Dollar dropped on the heels of the euro strength.
  • Japan’s Nikkei +0.6% after the BOJ’s downward revision to inflation forecast, extended projected timeline to hit 2% inflation target.
  • 10-year Treasury yield dipped to 2.27%.

Overnight & This Morning

  • US stocks lower at the open following earnings from bellwethers General Electric, Microsoft, and Visa.
  • European markets near worst levels of the session, as investors continue digesting ECB meeting.
  • Asia ended mostly lower amid light trading.
  • WTI crude oil lower (-0.8% to 46.55/bbl.), surrendering earlier gains.
  • Treasuries yields lower across the curve. 10-year note -3 basis points (-0.03%) to 2.24%.

 

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Key Insights

  • Next week: Focus likely on earnings over Fed. Corporate earnings are likely to overshadow the Federal Reserve (Fed) next week amid the busiest week of earnings season with nearly 40% of S&P 500 constituents slated to report. With the season off to a good start, it’s important to note that recent history (past 20 years) shows stocks have fared relatively well when earnings are in focus. Though the Fed holds their two-day monetary policy meeting with an announcement on Wednesday, no rate hike is expected. Next week’s U.S. economic calendar includes housing, manufacturing, durable goods, and second quarter gross domestic product (GDP) data. Overseas, minutes from the last Bank of Japan policy meeting are due out on Monday.

Macro Notes

  • BLOG: Nasdaq up 10 in a row. For the first time since February 2015, the tech-heavy index is up 10 consecutive days. Additionally, the S&P 500 Information Technology index on Wednesday made a new all-time high for the first time in 17 years. When you consider tech had a rough June, this bounce back is impressive. Today on the LPL Research blog we will take a closer look at where this win streak ranks in history and what tends to happen after 10 day win streaks.
  • What’s going on in Washington? Republican efforts in Washington, D.C. to resolve healthcare and budget challenges, and enable a pivot to tax reform, will continue to garner and warrant attention. Look for our latest policy thoughts in Monday’s Weekly Market Commentary.

 

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Click Here for our detailed Weekly Economic Calendar

Friday

  • UK: Public Sector Net Borrowing (Jun)
  • Canada: CPI (Jun)
  • Canada: Retail Sales (May)

 

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