- U.S. equities finished negative for the week: The Dow Jones Industrial Average (DJIA) closed 117 points lower, or fell 0.50%, to 23,422. The Standard & Poor’s 500 (S&P 500) index lost 6 points, or fell 0.21%, to 2,582. The Nasdaq closed last week 0.20% lower at 6,751. All major indexes were down on the week.
- S&P 500 Earnings Update: According to FactSet, 91% of the companies in the S&P 500 index have reported actual results for the third quarter of 2017 with 74% reporting earnings above analyst expectations. The blended earnings growth rate for companies that have reported so far is 6.1%, compared to the same period last year, above analyst forecasts of 3.1% for the quarter. The low earnings forecast for the quarter was driven by expectations for hurricane-related insurance payouts dragging down the financial sector and low commodity prices weighing down the materials sector.The forward 12-month Price-to-Earnings (P/E) ratio for the S&P is now 18.0. This P/E ratio is above both the 5-year average of 15.7 and the 10-year average of 14.1.
- Key reports/items for the upcoming week include, China’s economic data (Oct), U.S. Producer Price Index (Oct), Euro-zone Industrial Production data (Tue), U.S. Consumer Price Index (Oct), U.S. Industrial Production (Oct), and Housing Starts (Oct).
- Third quarter earnings season continues to wind down with results expected from Home Depot, TJX Companies, L Brands, Target, Cisco, Walmart, and Gap among others.