{"id":2362,"date":"2018-01-14T10:47:40","date_gmt":"2018-01-14T15:47:40","guid":{"rendered":"https:\/\/envisionco.net\/?p=2362"},"modified":"2018-01-14T10:47:40","modified_gmt":"2018-01-14T15:47:40","slug":"week-ending-1-12-2018","status":"publish","type":"post","link":"https:\/\/envisionco.net\/?p=2362","title":{"rendered":"Week Ending 1\/12\/2018"},"content":{"rendered":"<p><strong>HIGHLIGHTS<\/strong><\/p>\n<ul>\n<li>Stocks were up by 1.65% for the week and 4.14% for the year.<\/li>\n<li>Interest rates increased across the board, the 2-year is at 1.99%, yielding more than equities.<\/li>\n<li>Market bulls are counting on big earnings increases and a stable p\/e ratio.<\/li>\n<li>GDP estimates are above 3% for Q4 and Q1, indicating strong growth.<\/li>\n<\/ul>\n<p><strong>MARKET RECAP<\/strong><\/p>\n<p>What many are describing as a &#8220;melt-up&#8221; continued on Wall Street, as US equities increased by 1.65%. The market is now up 4.14% after nine trading days and has advanced eight out of nine times. The one loss for the year was on Wednesday when stocks dropped a mighty 0.16%. International stocks\u00a0were up 1.30% for the week and\u00a0are up 4.58% for the year. The dollar declined by 1.06% and crude oil increased by 4.65%.<\/p>\n<p>We had described a few times last year the market&#8217;s stairstep pattern of increases. Basically, stocks would consolidate and then advance, and repeat the pattern. Since mid-November, the stairsteps have been replaced by an accelerating angle higher.<\/p>\n<p><a href=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Stairstep.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-2366\" src=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Stairstep-300x129.png\" alt=\"\" width=\"300\" height=\"129\" srcset=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Stairstep-300x129.png 300w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Stairstep-768x329.png 768w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Stairstep-1024x439.png 1024w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Stairstep-500x214.png 500w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Stairstep.png 1587w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Meanwhile, interest rates are increasing across the board. The two-year treasury closed the week yielding 1.99%, more than the yield on US\u00a0stocks (about 1.80%). It was just recently that stocks were yielding more than the 10-year, now they yield less than the two-year.<\/p>\n<p><a href=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/2-Year-Treasury-Yield.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-2367\" src=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/2-Year-Treasury-Yield-300x130.png\" alt=\"\" width=\"300\" height=\"130\" srcset=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/2-Year-Treasury-Yield-300x130.png 300w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/2-Year-Treasury-Yield-768x333.png 768w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/2-Year-Treasury-Yield-1024x444.png 1024w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/2-Year-Treasury-Yield-500x217.png 500w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/2-Year-Treasury-Yield.png 1578w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Stock market bulls are banking on big earnings increases and a stable price\/earnings (p\/e) ratio. The earnings estimate for 2017 for the S&amp;P 500 is $131.48 per Thomson Reuters I\/B\/E\/S. For 2018, helped by tax cuts, earnings are estimated to come in at $150.15, an increase of 14.2%. 2019 estimates are for $166, an increase of 10.6%. These are optimistic numbers. The problem is that if interest rates continue to increase, there will be a gravitational pull for the p\/e ratio to decline, which will offset to\u00a0some degree the higher earnings. And then, of course, the higher earnings have to actually come through.<\/p>\n<p><strong>ECONOMY<\/strong><\/p>\n<p>The GDPNow estimate for 2017 Q4 growth increased by 1\/2% on a strong retail sales report. The estimate is now at 3.3%, up from 2.8%. The NY Fed Nowcast has growth estimated at 3.88% for Q4 and 3.21% for Q1.<\/p>\n<p>The Consumer Price Index rose by 0.1% in December. Core CPI was up 0.3%, the most since last January. Most of that increase was due to an increase in the cost of shelter. Year over year the index is up 2.1%.<\/p>\n<p>SCOREBOARD<\/p>\n<p><a href=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Performance-1-12-2018.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-2369\" src=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Performance-1-12-2018-149x300.png\" alt=\"\" width=\"149\" height=\"300\" srcset=\"https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Performance-1-12-2018-149x300.png 149w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Performance-1-12-2018-508x1024.png 508w, https:\/\/envisionco.net\/wp-content\/uploads\/2018\/01\/Performance-1-12-2018.png 536w\" sizes=\"auto, (max-width: 149px) 100vw, 149px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>HIGHLIGHTS Stocks were up by 1.65% for the week and 4.14% for the year. Interest rates increased across the board, the 2-year is at 1.99%, yielding more than equities. Market bulls are counting on big earnings increases and a stable &hellip; <a href=\"https:\/\/envisionco.net\/?p=2362\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1893,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2362","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/envisionco.net\/index.php?rest_route=\/wp\/v2\/posts\/2362","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/envisionco.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/envisionco.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/envisionco.net\/index.php?rest_route=\/wp\/v2\/users\/1893"}],"replies":[{"embeddable":true,"href":"https:\/\/envisionco.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2362"}],"version-history":[{"count":6,"href":"https:\/\/envisionco.net\/index.php?rest_route=\/wp\/v2\/posts\/2362\/revisions"}],"predecessor-version":[{"id":2373,"href":"https:\/\/envisionco.net\/index.php?rest_route=\/wp\/v2\/posts\/2362\/revisions\/2373"}],"wp:attachment":[{"href":"https:\/\/envisionco.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/envisionco.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/envisionco.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}