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WEEKLY MARKET UPDATE
After the Dow & S&P 500 hit new closing highs last week, investors will continue to focus on second-quarter earnings reports.
– Economic Data: We are scheduled for a light week on the economic data front, highlighted by Monday’s ISM Services; Tuesday’s Trade Balance; Wednesday’s Consumer Credit; Thursday’s Weekly Jobless Claims Data and Friday’s Wholesale Inventories. See below for full list of weekly economic reports.
– Corporate Earnings: Of the 392 companies in the S&P 500 that have reported earnings to date for Q2 2013, 68% 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%. 55% of companies have reported Q2 2013 revenue above analyst expectations. This is lower than the long-term average of 61% and higher than the average over the past four quarters of 48%. During the week of August 5, 57 S&P 500 companies are scheduled to report earnings for Q2 2013. See below for full list of corporate earnings reports.
– Crude Oil: To begin the week, NYMEX WTI Crude Oil is trading around the $106.00 a barrel level & Brent Crude is trading above $107.00 a barrel. In the 2013 YTD period, NYMEX WTI Crude Oil is up 13% while Brent Crude is up 1%.
– Currency: The US dollar managed to end the busy week a bit stronger, but the NFP took some of the wind out of its sails. ISM Non-Manufacturing PMI, US trade balance, and jobless claims, as well as rate decisions in Australia and Japan are the main market movers for the week ahead. Despite its lower close the past week, GOLD continues to retain its upside bias.
– PREVIOUS WEEK RE-CAP: (7/29 – 8/2)
Monday (7/29) – Stocks fell as investors were cautious before this week’s Federal Reserve meeting that could signal when the Fed might begin to scale back its stimulus efforts.
(S&P 500 -0.4%)
Tuesday (7/30) – Stocks ended mostly higher following gains in technology shares and stronger-than-expected earnings from Pfizer, but a selloff in the potash sector limited the advance.
(S&P 500 +0.04%)
Wednesday (7/31) – The S&P 500 ended a volatile session nearly flat after the Federal Reserve gave no hint that a reduction in the pace of its bond-buying program is imminent. But the index finished July up 5 percent to mark its best month since January.
(S&P 500 -0.01%)
Thursday (8/1) – The Dow and S&P 500 ended at record highs, with the S&P 500 rising above 1,700 after strong data on jobs and the services sector and as central banks said they would keep monetary stimulus in place.
(S&P 500 +1.3%)
Friday (8/2) – Stocks ended slightly higher after data showed the jobless rate fell in July but U.S. hiring slowed, which could make the Federal Reserve more cautious about scaling back its stimulus plan.
(S&P 500 +0.2%)
For the previous week, the S&P 500 rose 1.1%, the DJIA was up 0.6%, and the NASDAQ was higher by 2.1%
To begin the current week, the S&P 500 is up approx. 19.9% in the year-to-date period.
– Technical Update: In the latest week, the S&P 500 made a new closing high on Thursday & Friday, breaking through its 1,700 resistance mark we had witnessed over the last few weeks. Looking ahead, chart watchers and the electronic program trading community will be looking to see if it can stay above 1,700 as support now exists at the 1,650 level. However, if the Index falls back below 1,650, traders will begin to anticipate a move into the 1,600 support band.
Key Technical Levels (S&P 500):
On the upside (resistance) – 1,725
On the downside (support) – 1,675, 1,650, 1,625, 1,600, 1,550, are the next major marks in range on the charts.
* 50-day moving avg. = 1,655 & 200-day moving avg. = 1,561
MAIN EVENTS OF THE UPCOMING WEEK: (8/5 – 8/9)
– 10:00 AM ET – ISM Services – Jul – Expectations = 53.2
– Dallas Fed President Richard Fisher speaks to state retirement administrators in Portland on the U.S. economy.
– Markets in Canada are closed for a civic holiday.
– Tyson Foods Earnings – BMO
– Integrys Energy Group Inc Earnings – AMC
– Vornado Realty Trust Earnings – AMC
– Dun & Bradstreet Corp Earnings – AMC
– 8:30 AM ET – Trade Balance – Jun – Expectations = -43.4B
– Against a government warning that growth would slow this year, the Reserve Bank of Australia is expected to cut interest rates again.
– Cognizant Technology Solutions Corp Earnings – BMO
– CVS Caremark Corp Earnings – BMO
– Dominion Resources Inc Earnings – BMO
– Emerson Electric Co Earnings – BMO
– Fossil Group Inc Earnings – BMO
– IntercontinentalExchange Inc Earnings – BMO
– Parker Hannifin Corp Earnings – BMO
– Spectra Energy Partners LP Earnings – BMO
– C.H. Robinson Worldwide Inc Earnings – AMC
– DaVita HealthCare Partners Inc Earnings – AMC
– Marathon Oil Corp Earnings – AMC
– Walt Disney Co Earnings – AMC
– 3:00 PM ET – Consumer Credit – Jun – Expectations = 16.0B
– China’s trade balance is reported, and “given the better than expected” purchasing managers’ index, “people may say this is a turn,” says LPL Financial economist John Canally.
– Philadelphia Fed President Charles Plosser and Cleveland Fed President Sandra Pianalto each give speeches.
– The Bank of England issues its August inflation report and gives guidance on its intended response to data. Germany reports on industrial production statistics for June.
– Devon Energy Corp Earnings – BMO
– Duke Energy Corp Earnings – BMO
– Marsh & McLennan Companies Inc Earnings – BMO
– Pepco Holdings Inc Earnings – BMO
– Ralph Lauren Corp Earnings – BMO
– Time Warner Inc Earnings – BMO
– Prudential Financial Inc Earnings -AMC
– 8:30 AM ET – Weekly Jobless Claims – Expectations = 340K
– The Bank of Japan announces its interest-rate decision. BOJ Governor Haruhiko Kuroda holds a news conference.
– Markets in Turkey and Singapore, among others, are closed for celebrations relating to the end of Ramadan.
– Dean Foods Co Earnings – BMO
– Scripps Networks Interactive Inc Earnings – BMO
– T-Mobile US Inc Earnings – BMO
– CareFusion Corp Earnings – AMC
– Monster Beverage Corp Earnings – AMC
– NVIDIA Corp Earnings – AMC
– Priceline Com Inc Earnings – AMC
– 10:00 AM ET – Wholesale Inventories – Jun – Expectations = 0.4%
– NRG Energy Inc Earnings – BMO