This week we are seeing corporate earnings and corporate profits rebounding for the first time in the last five quarters. We need to see this momentum keep going as profits and earnings make stocks grow.
the week ahead is full of a great deal of portfolio impact data. One could say that it is boring… but important. We are looking for a confirmation that our economy is still moving along.
Surprisingly, there is much that investors can be thankful for this year. The election is behind us and with that all of the uncertainty that came with it. Last week we saw housing numbers jump up 25% and jobless claims go to the lowest they have been since 1973. Retail sales had their best two months in the past two years. This and other economic data gives us a positive outlook for the rest of the fourth quarter and the beginning of the new year.
No one will be complaining that the election is over. The affect it had on the markets was not dull at all. Tuesday night, when it looked like Donald Trump would win the election, the Dow fell 976 points. By Wednesday morning, however, the Dow was up.
It was assumed that the GDP data that came out Friday would be the biggest news of the day. The market reacted positively to those numbers and held strong until around 1pm when the news came out about the FBI Clinton email investigation. At that point the elections spooked the market and immediately fell off.
There are several potential market movers this week. There is a theme we are calling the 3 E’s, which are the earnings, the election, and the economy. Starting with the election, we believe the market has priced in a Clinton victory. Now attention is turning to the House of Representatives.