Highlights of the week ended July 14, 2017 and a look ahead to this week’s expected announcements and potential market-moving activity.
- U.S. equities finished positive for the week: The Dow Jones Industrial Average (DJIA) closed 223 points higher, or rose 1.04%, to 21,638. The Standard & Poor’s 500 (S&P 500) index gained 34 points, or rose 1.41%, to 2,459. The Nasdaq closed last week 2.59% higher at 6,312. The Dow and S&P500 hit record highs during the week.
- U.S. Economic Update: The WSJ Dollar Index, which tracks the US dollar against a basket of 16 currencies, fell 0.7% on Friday and 1.2% on the week, after weaker than expected June Consumer Price Index (CPI) and Retail Sales data was released. The CPI reading showed inflation was flat in June, missing economists’ expectations of a 0.2% increase. The lack of rebound following the 0.1% decline in May could cause trouble for Fed officials as they weigh subsequent rate hikes this year. Meanwhile, retail sales data for the same month disappointed, falling 0.2%, marking the second straight monthly decline. Following the news of these economic datapoints, coupled with the overall dovish commentary delivered by Fed Chairwoman Janet Yellen this past week, the odds of a rate hike in the fall of 2017 dropped below 50%.
- Second quarter earnings season continues with results expected from Blackrock, UnitedHealth Group, Johnson & Johnson, W.W. Grainger, and General Electric among others.
- Key reports/items for the upcoming week include, U.S. Empire manufacturing Index, the NAHB Housing survey for July, U.S. Housing Starts and the Philadelphia Fed Index, among others. The European Central Bank will provide a policy decision on Thursday morning.