Last Week:

  • U.S. equities finished positive for the week: The market continued to advance, setting new records during the week. The Standard & Poor’s (S&P500) index gained 63 points, or rose 2.23%, to 2,873. The Dow Jones Industrial Average (DJIA) closed 545 points higher, or rose 2.09% to 26,617. The Nasdaq closed 2.31% higher at 7,506.
  • U.S. economy continues to grow: Last week, the Bureau of Economic Analysis reported its advance estimate of fourth quarter 2017 U.S. GDP growth of 2.6%, a slowdown from the 3.2% third quarter growth rate. The increase in real GDP reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, residential fixed investment, state and local government spending, and federal government spending. These gains were partially offset by a negative contribution from private inventory investment and a rise in imports. Consumer spending was particularly strong, rising 3.8% during the period, the fastest since 2014. In addition, long-lasting items, known as durable goods rose 14.2% during the period, marking the fastest pace since 2009.

U.S. Real GDP Growth (percentage change, seasonally adjusted annual rate)

Source: U.S. Bureau of Economic Analysis (2018)

Look Ahead:

  • Fourth quarter earnings will continue this week, with earnings releases expected from Pfizer, McDonald’s, Automatic Data Processing (ADP), Microsoft, DowDuPont, United Parcel Service, Baxter, Altria, Apple, Mastercard, Verizon, ExxonMobil and Chevron among others.
  • In addition, the Economic calendar will garner a lot of attention this week with U.S. PCE on Monday, Trump’s state of the union address on Tuesday, The Federal Open Market Committee interest rate decision on Wednesday, U.S. Markit Purchasing Managers Index (PMI) on Thursday and U.S. jobs report on Friday. Outside the U.S., we will see Euro-zone Q4 GDP and confidence numbers on Tuesday, Euro-zone Consumer Price Index on Wednesday, and China and Euro-zone PMI numbers on Thursday.