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Weekly Update

Market Summary

Stocks posted solid gains last Friday after the White House announced that the US had reached a “phase one deal” between the US and China. Treasury Secretary Mnuchin also announced that new tariffs would not go into place this week. However, Mnuchin expects the US to impose a new round of tariffs on Chinese imports in December if Washington and Beijing don’t hammer out the details by then.
 
Wall Street is kicking off 3rd quarter earnings reports today with announcements from some of the larger banks. Corporate America has given less guidance during the quarter than usual, meaning that investors don’t have many clues on what to expect. S&P 500 companies have offered the fewest quarterly updates since 2000.  FactSet estimates that earnings for the S&P 500 are expected to decline 4.6% for the quarter. Margins are being pinched in several areas, including energy, with the decline in overall oil prices. Oil has been responding more to concerns about overall global growth and trade wars than to the historical geopolitical developments that typically would drive prices higher.   Besides earnings, some important economic reports are being released this week, including retail sales and industrial production numbers.
 
The United Auto Workers wants local union leaders in Detroit this Thursday to discuss GM negotiations. Historically, such a meeting indicates either a tentative deal was reached or a vote is needed to pursue  further strike action. Last Friday, the UAW said it had countered an offer from GM.
 
Brexit negotiators are meeting this week in an attempt to forge a deal that would allow Britain to leave the European Union with a deal by Halloween. European countries are cutting taxes and offering other incentives to persuade wealthy Britons to move after Britain’s ultimate departure.

US Economy – The Week Ahead

Tuesday, 10/15/2019

  • No Data

Wednesday, 10/16/2019

  • Retail Sales (Month-over-Month growth) – Consensus Estimate: 0.3%, Prior Month: 0.4%

Thursday, 10/17/2019

  • Initial Jobless Claims – Consensus Estimate: 214,000 (1.9% WoW), Prior Week: 210,000 (-4.6% WoW)
  • Housing Starts – Consensus Estimate: 1,306K (-4.3% MoM), Prior Month: 1,364K (12.3% MoM)
  • Industrial Production (Month-over-Month) – Consensus Estimate: -0.2%, Prior Month: 0.6%

Friday, 10/18/2019

  • Leading Economic Indicator Index (Month-over-Month) – Consensus Estimate: 0.1%, Prior Month: 0.0%

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