Monday Update

Monday, October 23, 2017 | Eagle, Colorado

Last week saw the S&P 500 close at a record high every single day. The “perfect week” was the first one since 1995. 3rd quarter earnings season is in full swing with 17% of S&P 500 companies having already reported for the period. According to FactSet, 76% of these companies have seen positive surprises.

The big story of last week was General Electric (GE) earnings, which came out on Friday morning. The stock was already down 23% for the year 2017 heading into the report and GE missed analyst expectations by a wide margin. Shares slid more than 8% but eventually turned positive later in the day after staging a major reversal. This was the company’s first report under their new CEO.

This week, we will see almost 200 of the 500 companies in the S&P 500 report their earnings for the quarter. Expectations are high among market watchers and if GE is any indication, even poor numbers will be bought. After all, this is a bull market you know.

The economic calendar is relatively light on Federal Reserve speeches this week with comments scheduled from only one FOMC member, Federal Reserve Bank of Minneapolis President, Neel Kashkari scheduled to speak on Thursday. On Wednesday morning, we will see economic reports for Durable Goods Orders and New Home Sales in September along with weekly Crude Oil inventories.

Thursday is a bigger day in international markets, specifically the Euro-zone with the European Central Bank rate decision announcement and press conference that day.

On Friday morning, we will get some numbers on Q3 GDP and the weekly oil-rig-count from Baker Hughes.

By the end of this week, more than half of the S&P 500 companies will have reported for the quarter and will have a very good idea of how much impact things like hurricanes have begun to have on the overall economy. We continue to struggle with the idea that these natural disasters can in some way be a net-positive for our economy.

In the meantime, the price of Bitcoin spiked over $6,100 for the first time this weekend. The so called “cryptocurrency” and many others like it are gaining steam in the face of unrelenting media attention. The big banks appear to be threatened, with folks like Jamie Dimon, the CEO of JP Morgan speaking out against the digital alternative to cash.

We don’t pretend to know how this will play out, but we certainly look forward to the show!

Have a great week!

Shane Fleury, RICP®
Chief Investment Officer
Elevate Capital Advisors