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WEEKLY MARKET UPDATE
– PREVIOUS WEEK RE-CAP: (5/13 – 5/17)
Monday (5/13) – Wall Street ended little changed as investors took a breather after indexes hit more record highs last week, but stronger-than-expected retail sales data kept declines in check.
(S&P 500 – Unchanged)
Tuesday (5/14) – Stocks rose to fresh highs as investors picked up large-cap companies’ shares on the expectation that central bank stimulus will help drive the rally further.
(S&P 500 +1.0%)
Wednesday (5/15) – Stocks rose, with the Dow and S&P 500 hitting new all-time highs in a broad market rally as the recent upward momentum persisted.
(S&P 500 +0.5%)
Thursday (5/16) – Stocks ended lower, with declines picking up steam late in the day after a Federal Reserve official said the central bank could begin easing up on its monetary stimulus this summer.
(S&P 500 -0.5%)
Friday (5/17) – Stocks continued their climb into uncharted territory, racking up the fourth week of gains in a row as encouraging economic data prompted investors to pick up shares of growth companies.
(S&P 500 +1.0%)
For the previous week, the DJIA rose 1.6%, the S&P 500 climbed 2.0%, and the NASDAQ added 1.8%.
To begin the current week, the S&P 500 is up approx. 16.9% in the year-to-date period.
– Technical Update: In the latest week, the S&P 500 continued to set new all-time highs. Since breaching the 1,600 level in early May, we have witnessed aggressive technical momentum help push the Index steadily higher on a weekly basis. Looking ahead, chart watchers and the electronic program trading community will most likely maintain a bullish bias on equities as long as we remain above the 1,600 level with the 1,570 – 1,575 support band remaining a key mark on the charts. However, a pullback below this range could trigger an aggressive round of short-term technical sell pressure market-wide.
Key Technical Levels (S&P 500):
On the upside (resistance) – 1,667 (new all-time intra-day high)
On the downside (support) – 1,650, 1,600, 1,570 – 1,575, 1,550, 1,540 & 1,525-1,530 are the next major marks in range on the charts.
* 50-day moving avg. = 1,589 & 200-day moving avg. = 1,495
– Economic Data: We are scheduled for a light week on the economic data front, highlighted by Wednesday’s Existing Home Sales & FOMC Minutes release, Thursday’s Weekly Jobless Claims & New Home Sales data and Friday’s Durable Orders. See below for full list of weekly economic reports.
– Corporate Earnings: Corporate earnings continue to trickle in this week with 25 S&P 500 companies scheduled to report. As of 5/17/13, of the 463 companies in the S&P 500 that have reported earnings to date for Q1 2013, 67% have reported earnings above analyst expectations. This is higher than the long-term average of 63% and higher than the average over the past four quarters of 67%. On the revenue front, 47% of companies have reported Q1 2013 revenue above analyst expectations. This is significantly lower than the long-term average of 62% and lower than the average over the past four quarters of 52%. See below for full list of corporate earnings reports.
– Crude Oil: To begin the week, NYMEX WTI Crude Oil is trading around the $96.00 a barrel level & Brent Crude is trading just above $104.00 a barrel. In the 2013 YTD period, NYMEX WTI Crude Oil is up over 2.5% while Brent Crude is down around 3%.
MAIN EVENTS OF THE UPCOMING WEEK: (5/20 – 5/24)
– Regional Fed presidents Charles Evans and John C. Williams speak about the economy in different venues.
– Markets closed in Canada, Austria, and Switzerland among others
– JPMorgan Chase holders take a nonbinding vote on whether to split the roles of chairman and chief executive officer, which Jamie Dimon now holds.
– Dallas Fed President Richard Fisher discusses Fed operations and gives an update on the U.S. and Texas economy.
– Autozone Inc Earnings – BMO
– Best Buy Incorporated Earnings – BMO
– Home Depot Inc Earnings – BMO
– Medtronic Inc Earnings – BMO
– 10:00 AM ET – Existing Home Sales – April – Expectations = 4.98M
– Fed Chairman Ben Bernanke’s testimony on the economic outlook before Congress will be scoured for clues to when QE might be scaled back.
– The Fed releases minutes of its latest meeting on monetary policy.
– The Bank of Japan issues its interest-rate decision; BoJ Governor Haruhiko Kuroda speaks to reporters.
– St. Louis Fed President James Bullard lectures on the “U.S. Economy and Monetary Policy” at a university in Frankfurt.
– Lowe’s Companies Inc Earnings – BMO
– Staples Inc Earnings – BMO
– Target Corporation Earnings – BMO
– Hewlett Packard Earnings – AMC
– 8:30 AM ET – Weekly Jobless Claims – Expectations = 348K
– 9:00 AM ET – FHFA Housing Price Index – Mar – Prior = +0.7%
– 10:00 AM ET – New Home Sales – April – Expectations = 425K
– Dollar Tree Earnings – BMO
– Ralph Lauren Corp Earnings – BMO
– Salesforce.com Inc Earnings – AMC
– GAP Inc Earnings – AMC
– 8:30 AM ET – Durable Goods Orders – Apr – Expectations = 1.6%
– Bond markets close early in advance of Memorial Day weekend.
– Abercrombie & Fitch Earnings – BMO
* U.S. financial markets closed on Monday (5/27) for the Memorial Day holiday.