Year: 2018

The S&P 500 gained 0.86 percent this week to close at its first record high since January.  The Nasdaq also hit a new high with a 1.66-percent 5-day advance, and the Russell 2000 Index gained 1.93 percent on the week.

Existing home sales hit an annualized pace of 5.34 million in July. Sales were down 1.5 percent from a year ago. Inventory remains low. Prices have increased 4.5 percent in the past 12 months and the average home has sold within a month of listing. New homes sales remained at the midpoint of the ascending range in place since 2010. July sales were an annualized 627,000.

Weekly jobless claims stayed near four-decade lows at 210,000. The flash manufacturing and service PMIs show robust expansion for August. The final number is due next week.

Federal Reserve meeting minutes show officials are aiming for a September rate hike, consistent with futures market odds. Officials also discussed changing the language in the Fed policy statements from accommodative to neutral. Futures market odds of a fourth hike in December remain in the 65 to 75 percent range seen over the past few weeks.

Crude oil rebounded to $68.72 per barrel this week after a large decline in inventory.

The U.S. Dollar Index snapped a 5-day losing streak on Thursday as emerging markets declined. The Brazilian real fell below $0.25 as speculators moved beyond Turkey. South Africa’s rand also slid after the country’s recent constitutional change that allows the government to seize white-owned farmland. Reports say landowners are being compensated about 10 cents on the dollar. Economic sanctions on Turkey broke that nation’s currency. Speculators are betting South Africa could follow a similar trajectory.

SPDR S&P Retail (XRT) hit a new all-time high this week with solid retail earnings. Target (TGT) headlined the week with a strong earnings beat. Lowe’s (LOW) gained as much as 10 percent after its earnings report before giving back some of those gains. Retail’s strength also lifted SPDR Consumer Discretionary (XLY).

Medical device maker Medtronic (MDT) beat sales and profit forecasts. iShares U.S. Medical Devices (IHI), which counts MDT as its top holding, climbed to a new 52-week high.

This will be a light week for economic data. Existing home sales for July will be out on Wednesday, followed by new home sales on Thursday. Analysts expect an annualized 5.41 million existing sales and an annualized 641,000 in new home sales.

The minutes from the July Federal Open Market Committee meeting will be released at 2 PM on Wednesday. The Fed held rates steady in July but shifted its policy statement in a slightly hawkish direction. Odds of a September rate hike stand at 94 percent coming into this week, and odds of another hike in December sit at 65 percent.

Flash manufacturing PMIs for August should show a robust expansion in the United States. Economists will focus on foreign PMIs and Europe’s decelerating growth.

The U.S. dollar hit a new 52-week high last week before pulling back. The key levels to watch in the week ahead are 95 and 96.61. The former marked resistance from late May through August, and if the U.S. dollar is breaking out it should stay above it. The latter number is the high from last week. Speculators are more bullish on the U.S. dollar than at any time in the past 15 months.

Long-term bonds look vulnerable to a short-squeeze rally, one that could further lift the U.S. dollar amid weakness in emerging markets. The 10-year yield came into the week at 2.87 percent, the lower end of a nearly seven-month trading range that stretches from 2.7 to 3.1 percent.

Crude oil fell to a $65 handle last week. A surprisingly large inventory buildup sent prices $2 lower on Tuesday and Wednesday. West Texas Intermediate crude hasn’t traded below $64 since April.

Earnings season is winding down, but retail earnings season will continue to pour in this week. Smaller retailers will follow last week’s strong earnings from Home Depot (HD) and Wal-Mart (WMT) that pushed SPDR S&P retail (XRT) to a new 52-week high. Some of the larger firms reporting this week will include Kohl’s (KSS), Lowe’s (LOW), Target (TGT), L Brands (LB), Williams-Sonoma (WSM), Gap (GPS), Ross Stores (ROSS) and Footlocker (FL).

Estee Lauder (EL), BHP Billiton (BHP), Medtronic (MDT), Analog Devices (ADI), Alibaba (BABA), Autodesk (ASDK), Intuit (INTU), HP Inc (HPQ) will also report this week.