{"id":1558,"date":"2016-10-31T08:03:00","date_gmt":"2016-10-31T12:03:00","guid":{"rendered":"https:\/\/envisionco.net\/?p=1558"},"modified":"2016-10-31T08:03:00","modified_gmt":"2016-10-31T12:03:00","slug":"week-ending-10282016","status":"publish","type":"post","link":"https:\/\/envisionco.net\/?p=1558","title":{"rendered":"Week Ending 10\/28\/2016"},"content":{"rendered":"

PERFORMANCE<\/p>\n

US equity markets fell in the US and around the world fell about 0.9%. Bond markets also fell about 0.6%. Interest rates have been\u00a0rising and that has pushed bonds down and has been a drag on equities. Interest rate sensitive stocks like REITs fell. The Vanguard REIT ETF (VNQ) fell 3.6%. Regional banks rallied by 2.6% (KRE).\u00a0Banks are likely to be helped by higher interest rates.<\/p>\n

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The stock chart of the\u00a0SPY (SP500 ETF)\u00a0is showing a descending triangle. Some technical analysts consider that a bearish pattern that shows distribution of stocks. We are slightly overdue for a pullback at this point (see our Webinar from last week, link below), and given all the political uncertainty, there is a reasonable (not definite)\u00a0chance for a selloff. You can also make the opposite case that if the market can hold support in the 212 area it can break out of the triangle to the upside.<\/p>\n

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TREASURY RATES<\/p>\n

The treasury curve continues to get steeper. The 10 and 30-year were up by 12 and 14 basis points for the week, while the 2-year increased by only 2 basis points. For the entire month, the 2-year increased by 9 basis points and the 10-year by 26 basis points.<\/p>\n

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EARNINGS<\/p>\n

According to Factset, 58% of SP500 companies have now reported earnings. 74% have beaten the mean estimate and 58% have beaten the mean sales estimate. So far, the blended earnings growth rate is 1.6%, it that trend continues, the 5-quarter losing streak for earnings (consecutive quarters of declining year over year earnings) will end.<\/p>\n

GDP<\/p>\n

The initial estimate for Q3 GDP by the Bureau of Economic Statistics came in at a surprisingly strong 2.90%. That beat the Q2 number (1.4%)\u00a0by more than double. Meanwhile, GDPNow is estimating Q3 growth at 2.1%. The Nowcast remained unchanged at 2.2% for Q3 and 1.4% for Q4. The economy continues in slow growth mode.<\/p>\n

LINK TO OUR QUARTERLY WEBINAR<\/a>:<\/p>\n