Markets hit highs amid Senate action
10/23/17

You could almost call it groundhog week, as last week ended with movement very similar to the one before it. Arguably though, not too many people will be complaining about reliving weeks where the markets continue to set record highs:

  • The S&P 500 Index (SPX) ended near 2,570 (breaking previous high of 2564.11).
  • The Nasdaq 100 Index (NDX) ended near 6,113 (all-time high of 6129.48).
  • The Russell 2000 Index (RUT) ended near 1,510 (all-time high of 1514.94).
S&P 500, 10/16/17 - 10/20/17

Source: OptionsHouse by E*TRADE

To top things off, last week ended with a bit of a bang, as the markets all opened higher after the budget proposal was approved by the Senate. This was seen as clearing a hurdle toward an overhaul to the tax code, which many continue to believe will serve as delivering a needed shot in the arm to boost the broader economy.

Financials in particular performed well following the news from our nation’s capital. Bank stocks surged on Friday as Citigroup (NYSE: C), Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), and US Bancorp (NYSE: USB) all traded higher.

PayPal (NASDAQ: PYPL) announced earnings last week and beat Wall Street expectations on both revenue and earnings. PYPL reported Thursday after the close and the stock gapped higher on Friday.2

Of course it wasn’t all good news last week. Proctor & Gamble (NYSE: PG) dropped following their earnings report. 

General Electric (NYSE: GE) also struggled last week following their third-quarter earnings report that was well below Wall Street expectations. GE also dropped its guidance for expectations for the rest of the year.3

This week continues to be quite busy as we’re in the thick of earnings season. Today before the open industrial goods manufacturer Boise Cascade (NASDAQ: BCC) and consumer goods manufacturer Kimberly-Clark (NASDAQ: KMB) report, while after the close it will be mobile communication provider T-Mobile (NASDAQ: TMUS).

Tomorrow more earnings reports will come from big names such as AT&T (NYSE: T), Caterpillar (NYSE: CAT), Chipotle Mexican Grill (NYSE: CMG), Eli Lilly (NYSE: LLY), General Motors (NYSE: GM), and McDonald’s (NYSE: MCD). One report that may garner special attention due to their well-publicized security breach is Equifax (NYSE: EFX).

Later in the week we’ll hear from Dow Chemical (NYSE: DOW), Freeport McMoRan (NYSE: FCX), Alphabet (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Altria (NYSE: MO), Chevron (NYSE: CVX), and Exxon Mobil (NYSE: XOM).

Economic numbers this week include Jobless Claims on Thursday and GDP on Friday. So busy to say the least, but packed with potential opportunities for intrepid traders.

 

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1. The Wall Street Journal: Senate Republicans push through budget proposal, clearing path to tax overhaul. 10/19/17.

2. MarketWatch: PayPal shares rise on third-quarter earnings, revenue beat. 10/19/17.

3. Bloomberg: What Wall Street Has to Say About GE's Shock Cut to Its Forecast. 10/20/17.