Market Perspective for November 7, 2016

The market rebounded from a nine-day decline on Monday following the FBI’s reassurance that Hillary Clinton’s email scandal will not lead to criminal charges, though another swing is likely in the wake of tomorrow’s election.  All major indexes recovered more than two percent before Monday’s closing bell, led by the Dow Jones Industrial Average’s 371-point advance. The Dow finished the day up 2.08 percent with its largest one-day gain since August 2015. The S&P 500 climbed 2.22 percent, the Nasdaq 2.37 percent and the Russell 2000 advanced 2.50 percent.

The U.S. presidential election will overshadow the few data sets and earnings reports scheduled for this week. The inflation and employment targets set by the Federal Reserve are on track for a December interest rate hike and the economy should be able to withstand any short-term volatility following the election. British lawmakers are expected to debate the implications of the British court’s earlier decision challenging the Brexit vote and may affect overseas trading as well as the strength of the British pound, the Euro and the U.S. dollar.

Chinese trade balance figures will be released on Tuesday. Exports are expected to fall 6 percent, improving from last month’s 10 percent. China’s consumer price index (CPI) is forecast to rise 2.1 percent. The Jobs Opening and Labor Turnover Survey (JOLTS) for September, also due out on Tuesday, is forecast to show a slight decrease in job openings. Inventories are expected to rise 0.2 percent on Wednesday’s Monthly Wholesale Trade report. Weekly crude inventory is expected to increase and further suppress the price of a barrel of West Texas Intermediate Crude. Initial unemployment claims are expected to fall slightly from last week. The latest preliminary University of Michigan Consumer Sentiment Survey, which is forecast to rise slightly, will be released Friday.

Several large retailers, pharmaceutical firms, Shake Shack (SHAK) and the Walt Disney Co. (DIS) will report earnings this week. Priceline shares rose sharply through Monday after-hours trading following earnings and revenues that handily beat estimates. Shake Shack’s profit margins and growth estimates will be of interest to investors when SHAK reports after trading on Wednesday. Disney is scheduled to report Thursday. Valeant Pharmaceuticals (VRX), Mylan (MYL) and AstraZeneca (AZN) will also report this week and may comment on the impact of proposed price control regulations.  Macy’s (M), J.C. Penny (JCP) and Kohl’s (KSS) will report earnings this week as brick-and-mortar retailers head into the holiday shopping season.

    Your Cart
    Your cart is emptyReturn to Shop