Market Update: Monday, April 23, 2018


Daily Insights

  • Earnings season is off to a strong start. With 87 S&P 500 Index companies having reported first quarter 2018 results, Thomson-tracked earnings for the quarter are tracking to an impressive 20% year-over-year increase, above the 18% expected as of April 1. The strong increase is being driven primarily by solid economic growth, a weak U.S. dollar, and the new tax law. Beat rates for earnings and revenue, at 79% and 71% respectively, are well above historical averages. Financials and industrials, two of our favorite sectors, have delivered the most upside thus far. Forward estimates–both calendar 2018 and the next four quarters–have inched higher since quarter-end, an encouraging development for the earnings outlook reflecting mostly positive guidance from corporate America thus far. More than 180 S&P 500 companies will report results this week.

  • Happy Earth Day! Earth Day was celebrated yesterday, and this environmentally focused holiday may have some investors thinking about how the companies they invest in impact the world around us. Today on the LPL Research blog we highlight sustainable investing and the multiple strategies that are available to help investors align their portfolios with their values.

  • The week ahead. In addition to the continuation of earnings season, this week investors will get a global read on consumer sentiment and the business environment with consumer confidence and purchasing manager data due out in the United States, the Eurozone, France, Germany, and Japan. The U.S. economic calendar is also highlighted by new and existing home sales early in the week, followed by first quarter gross domestic product (Bloomberg consensus is 2.0%) and core personal consumption expenditures, the Federal Reserve’s (Fed) preferred inflation measure, on Friday.

  • We bust some market myths in this week’s Weekly Market Commentary, due out later today. There are several myths attached to certain market indicators that have a tendency to distract investors from what may really matter. We believe the overall economic backdrop is currently quite positive thanks in large part to very strong corporate earnings trends, while market sentiment and technicals continue to suggest future equity strength.

  • Beige Book continues to suggest steady growth. The Fed released its latest Beige Book last week ahead of the May 1-2 Federal Open Market Committee meeting. Our Beige Book Barometer (strong words minus weak words) fell to +55 in April, down from +68 in March, but remains within its recent range and consistent with our prediction for steady economic growth. Price and wage pressures remained moderate, but tariff trade concerns were evident (tax down, trade up, inflation words high and rising). Additional detail will be available in our Weekly Economic Commentary, due out later today.


Click Here for our detailed Weekly Economic Calendar








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