- U.S. equities finished positive for the week: The Dow Jones Industrial Average (DJIA) closed 106 points higher, or rose 0.45%, to 23,434. The Standard & Poor’s 500 (S&P 500) index gained 6 points, or rose 0.23%, to 2,581. The Nasdaq closed last week 1.09% higher at 6,701.
- U.S. Gross Domestic Product: Last week, the Commerce Department reported U.S. GDP grew 3.0% during the third quarter, after expanding 3.1% in the second quarter. During the quarter, consumer spending slowed to 2.4% from 3.3% in the second quarter, residential investments declined 6% and final sales to domestic purchasers fell to 1.8% from 2.7% in the second quarter. The expansion during the quarter was above economists’ expectations of 2.5% and particularly unexpected considering the impact of Hurricane Harvey and Irma at the beginning of the period.
- U.S. Fed Chair nominee expected Friday: Later this week, President Trump is likely to announce his nominee for the Fed Chair position after Janet Yellen’s four-year term expires in February of 2018. Although the president has not made a formal decision, the candidates in contention seems to be narrowed down to three – Janet Yellen (re-appointment), Fed Gov. Jerome Powell and Stanford University Economist John Taylor. At this point, the consensus seems to be emerging around Jerome Powell as the president’s likely nominee. Mr. Powell, a Republican, joined the Fed board in 2012 and had previously served as treasury secretary under George H.W. Bush. Powell has been dovish during his tenure on the Federal Open Market Committee and is likely to continue down the current path of gradually raising short-term interest rates and shrinking the Fed’s balance sheet. However, unlike Yellen, Powell is expected to focus on rolling back some of the post-crisis financial regulation put in place by the previous administration.
- Key reports/items for the upcoming week include, U.S. Personal Income/Spending (Sep), U.S. Consumer Confidence (Oct.), ADP Jobs Report (Oct.), Construction Spending (Sept.), and The Federal Open Market Committee Meeting on Wednesday.
- Third quarter earnings season continues with results expected from Mondelez, Mastercard, Eaton, Pfizer, DowDuPont, Automatic Data Processing (ADP) and Starbucks among others.