Market Perspective for April 24, 2017

French stocks rallied 4 percent following the first round of voting and iShares MSCI France (EWQ) climbed more than 5 percent. Major U.S. indexes opened higher by 1 percent as well. Stocks also benefited from President Trump’s tax cut package, which he is expected to outline on Wednesday.
Rising odds of a June rate hike lifted Financials nearly 3 percent on Monday. The 10-year Treasury yield also briefly spiked back above 2.3 percent. The 2.3 percent level is the dividing line between near-term bull and bear market for interest rates.
Both the Conference Board and University of Michigan consumer confidence indexes will be out this week. Analysts forecast a slight decline from recent highs. New and pending home sales for March are also expected to pull back slightly from February’s pace, a consequence of winter storms in the Northeast and Midwest.
First quarter-GDP is due at 8:30 AM on Friday. The consensus forecast calls for 1.1 percent growth. Growth typically picks up in the second half of the year, and once the President and Congress outline their tax plans, business should accelerate.
The European Central Bank will meet on Thursday and is not expected to change policy. The Eurozone CPI is due on Friday and economists forecast an increase of 1.8 percent in headline CPI, along with a 1.0 percent rise in core CPI. The Bank of Japan will meet on Wednesday. Analysts do not foresee a policy change.
Earnings season is in full swing this week. Biotechnology, pharmaceuticals, chemicals, defense, technology, energy and consumer staples will be among the sectors most impacted.
Major companies reporting on Tuesday alone include AT&T (T), Coca-Cola (KO), Novartis (NVS), 3M (MMM), McDonald’s (MCD), Eli Lilly (LLY), Texas Instruments (TXN), Lockheed Martin (LMT), DuPont (DD), Biogen (BIIB), Caterpillar (CAT) and Capital One (COF).
Proctor & Gamble (PG), Pepsi (PEP), Amgen (AMGN), Boeing (BA), United Technologies (UTX) and General Dynamics (GD) and Northrop Grumman (NOC) are scheduled to report on Wednesday.
Thursday will be pivotal for the technology sector. Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), Intel (INTC) will all report, in addition to Abbvie (ABBV), Celgene (CELG), Bristol-Myers Squibb (BMY), United Parcel Service (UPS), Starbucks (SBUX), Dow Chemical (DOW), Baidu (BIDU), Comcast (CMCSA), Ford (F), Raytheon (RTN), Deutsche Bank (DB), Southwest Airlines (LUV) and Vale (VALE).
The week will wrap up with oil giants Exxon (XOM) and Chevron (CVX) headlining, Colgate-Palmolive (CL), General Motors (GM) and Phillips 66 (PSX).


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