Market Perspective for August 21, 2017

Healthcare led most of the market higher on the day. Gains were heavily concentrated in the healthcare provider and medical device subsectors. Crude oil prices faded on Monday as SPDR Energy (XLE) fell to a new 52-week low.

This week will be light on economic data. The flash PMIs for August and July new home sales will be out on Wednesday, followed by July existing home sales on Thursday, and durable and capital goods orders on Friday.

The Jackson Hole Symposium in Wyoming will feature Federal Reserve Chair Janet Yellen’s Friday morning talk on financial stability. European Central Bank President Mario Draghi will also be in attendance. Global investors will be on the lookout for signs of tightening at the ECB.

Currency and bond markets were calm on Monday in anticipation of the symposium. The 10-year Treasury traded in a tight range slightly below 2.2 percent. The U.S. Dollar Index weakened as both the euro and yen strengthened. Commodity currencies such as the Australian and Canadian dollars were also modestly stronger.

Medtronic (MDT), a major component in medical device funds, will reports earnings on Tuesday. Analysts expect $1.08 in earnings per share, up from $1.03 a year ago. (CRM) is expected to report $0.09, up a penny from last year. Forecasts have homebuilder Toll Brothers (TOL) at $0.68 per share versus $0.62 a year ago.

The Royal Bank of Canada (RY), Lowe’s (LOW) and HP (HPQ) will report on Wednesday. A strong housing market has pushed analysts’ predictions to $1.62 at Lowe’s, an 18-percent increase from last year.

On Thursday, tech companies Broadcom (AVGO), Vmware (VMW) and Autodesk (ADSK) will report with retailers such as Tiffany (TIF), Dollar Tree (DLTR) and Ulta Beauty (ULTA).

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