Market Perspective for July 15, 2019

The major indexes were mixed on Monday as investors brace for earnings season. The Nasdaq rose 0.17 percent, while the S&P 500 gained 0.02 percent. The Dow Jones Industrial Average returned 0.10 percent.

SPDR Utilities (XLU) advanced 0.40 percent, SPDR Technology 0.33 percent and SPDR Consumer Discretionary (XLY) 0.32 percent to lead sector performance. Weakness was concentrated in SPDR Energy (XLE), which fell 0.90 percent as oil fell back below $60. Traders bid up oil prices above $60 per barrel last week as Hurricane Barry approached the Gulf region, but the storm didn’t create as much damage as feared.

The Empire state index of manufacturing in the New York Federal Reserve bank’s territory jumped to 4.3 in July. Numbers above zero indicate expansion.

Economists predict June retail sales will cool after several strong months. They see growth in headline sales and ex-autos slowing to 0.1 percent from 0.5 percent the prior month. Industrial production is also expected to ease to 0.1 percent growth in June.

The National Association of Homebuilders confidence index for July is out on Today. Housing starts and building permits for June are due on Wednesday.

The University of Michigan will release its advance consumer confidence reading for July on Friday. Analysts are looking for a small increase.

Bond yields fell on Monday. The 10-year yield settled at 2.09 percent. It has rebounded from a low of 1.95 percent on July 3. Most bond funds gained on the day. iShares 20+ Year Treasury (TLT) advanced 0.58 percent, Invesco Senior Bank Loan (BKLN) 0.18 percent, iShares iBoxx Investment Grade Corporate Bond (LQD) 0.17 percent, PIMCO Corporate Bond (CORP) 0.15 percent and iShares iBoxx High Yield Corporate Bond (HYG) 0.07 percent.

Citigroup (C) kicked off a busy earnings week by beating expectations, but weaker trading revenue tempered the report. Shares fell 0.06 percent on the day. Citigroup adds to the string of companies beating earnings estimates this quarter. Coming into this week, 83 percent of earnings were better than expected.

Johnson & Johnson (JNJ), JPMorgan (JPM), Wells Fargo (WFC), Goldman Sachs (GS), Charles Schwab (SCHW), CSX Corp (CSX), United Continental (UAL), Dominos Pizza (DPS) and First Republic Bank (FRC) report earnings on Today.

Wednesday brings Netflix (NFLX), Bank of America (BAC), Abbott Labs (ABT), International Business Machines (IBM), U.S. Bancorp (USB), eBay (EBAY) and Bank of New York (BK) deliver results.

Microsoft (MSFT), UnitedHealth Group (UNH), Danaher (DHR), Morgan Stanley (MS), Honeywell (HON), Intuitive Surgical (ISRG), Union Pacific (UNP), Philip Morris International (PMI) and Novartis (NVS) report on Thursday.

State Street (STT), Schlumberger (SLB), BlackRock (BLK) and American Express (AXP) close out the week.

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