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By Bill Hornbarger, Chief Investment Officer


Three Things to Watch

  • Approximately 30% of the S&P 500 members report earnings this week, led by tech giants such as Apple, Amazon, Alphabet, Facebook, and Microsoft. To date, earnings for the quarter are coming in well above expectations. The index closed at an all-time high on Thursday, but companies that have missed earnings projections have been punished by market participants.
  • Bond yields will remain in focus as the 10-year Treasury touched 1.70% last week before falling to 1.63% to close the week. The high for the year set in March was 1.74% and inflation and the potential for tapering remain top of mind.
  • There will be a few closely watched economic indicators released this week. Consumer confidence will be released on Tuesday and is expected to be softer. The future expectations readings in particular have been soft in recent months as the consumer is torn between higher stock prices and higher gas prices and inflation fears. Durable goods orders are expected to slip 1%, while the Fed’s favored inflation reading, core personal consumption expenditures, is expected to move slightly higher to 4.4% year over year.

Three Things to Know

  • Halloween is the biggest holiday of the year for candy makers, followed closely by Christmas and Easter. Valentine’s Day is a distant fourth. October is the month with the most candy sold and Oct. 28 is the day of the year with the most candy sales. And of all the 365 days in the year, the top five candy selling days are all in October. The average American household spends $44 a year on Halloween candy. (Source: answerstoall.com)
  • Earnings reports for the third quarter have been better than expected so far. Overall, reported earnings growth has come in at +46%, which is well ahead of initial expectations for +23%, and 79% of companies have reported surprises to the upside. (Source: The Market Ear)
  • According to the University of Michigan Survey, one-year inflation expectations currently stand at 4.8%, the highest since August 2008. According to the same survey, the five-year expected inflation rate is 2.8%, below where it was earlier this year when it peaked at 3%, the highest reading since 2013. (Source: Haver Analytics)

 

The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.