October 16, 2017 – Weekly Market Commentary



 

American Flag

Michael Sheetz – CNBC
Consumer Confidence Soars to Highest Level Since 2004

Summary: Consumer sentiment beat expectations and rose to its highest level since 2004. The rise was driven by broad-based optimism. All age and income groups reported confidence in economic prospects. The data indicates that consumer spending will continue to improve this year. 

 

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Jeff Cox – CNBC
December Rate Hike All but Certain Despite Low Inflation

Summary: The minutes from the September Fed meeting showed that a December rate hike is likely. Some Fed officials voiced concerns that low inflation may not be transitory, as previously thought. Despite these concerns, the majority of officials believe that the economy can support further rate hikes. 

 

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Adam Shell – USA Today 
IMF Raises its Forecast for Global Growth

Summary: The IMF raised its estimate for global economic growth for 2017 and 2018 to 3.6% and 3.7%, respectively. Stronger growth in Japan, emerging Asia, emerging Europe, and Russia is expected to fuel the expansion. US growth is expected to slightly contract.  

 

Washington D.C.

Maragot Sanger-Katz – The New York Times
What We Know About Trump’s Twin Blows to Obamacare

Summary: President Trump signed an executive order that stops subsidies to insurance companies to help them lower deductibles for low-income customers. Health care services stocks fell on the news. Although no laws have officially been changed, the funding cut could result in higher premiums for some customers and could cause insurers to exit some markets. 

 

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Blanca Rodriguez and Sonya Dowsett – Reuters
Spain Gives Catalan Leader 8 Days to Drop Independence

Summary: Spain’s Prime Minister gave the Catalan government 8 days to drop an independence bid. If the bid is upheld, Spain has vowed to suspend Catalonia’s political autonomy and rule the region directly. The stakes are high for Spain. The Catalonian economy represents one-fifth of the country’s economic output and more than one-quarter of its exports. 

 

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Liz Ann Sonders, Jeffrey Kleintop, Brad Sorensen – Charles Schwab
Preparing for the Latter Innings

Summary: Trends in the market are suggesting that we are entering the later stages of the market cycle. This does not immediately indicate that a pullback in stocks is on the horizon, but it does mean that new catalysts will be needed to drive growth. Q3 earnings are of utmost importance. If companies continue to beat expectations the late innings of the cycle will likely extend.  

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