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After The Close - The stock market managed to press ahead earlier today, before weakening in the afternoon. At the close of trading, the averages were mixed. The Dow Jones Industrial Average was down eight points; the S&P 500 Index was off nominally; and the technology-heavy NASDAQ was higher by two points. Market breadth was slightly favorable, with winners just ahead of losers on the NYSE. Strength was seen in the consumer cyclical names and in the basic materials issues, while weakness was found in the energy and healthcare stocks.

Meanwhile, traders received just one economic report this morning. Specifically, the Empire Manufacturing Survey came in at 9.8 for the month of July, where analysts had been expecting a somewhat better reading. Tomorrow we will get a look at import and export prices for the month of June. A monthly report on housing prices from the National Association of Home Builders will also be delivered.

Elsewhere, a few widely-watched corporations posted their financial reports today. Shares of BlackRock (BLK) moved lower today, after the financial giant posted weaker-than-anticipated results. After the market closes we hear from Netflix (NFLX). American Express (AXP Free American Express Stock Report) and Microsoft (MSFT Free Microsoft Stock Report) will deliver their numbers later this week. No doubt, the second-quarter earnings season is getting underway. The market will likely react to the news, especially when bellwether companies weigh in with reports that have implications for entire business sectors. 

Technically, the equity market has been holding up well.  From here, much will depend on the quality of the second-quarter earnings season. - Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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12:00 PM EDT - After a flurry of buying last week that pushed the major equity averages to all-time highs or near record levels, investors are taking a bit of a breather this morning. The indexes started out the session not too far removed from the neutral line and have stayed in a tight band. However, we have seen a mild pick up in the buyers returning to the market in the last half hour. Thus, as we approach the midday hour on the East Coast, the Dow Jones Industrials, the tech-heavy NASDAQ, and the broader S&P 500 Index are sporting nominal gains, but some of the arrows now seem to be pointing in the direction of the bulls.

The broader market fundamentals are painting a similar picture. The spread between advancing and declining stocks started out razor thin on both the New York Stock Exchange and the NASDAQ, but is now widening in favor of the winning issues on both exchanges. Likewise, the movement among the 10 major equity groups is still minimal, but now most of the arrows are pointing upward. The broader small- and mid-cap sectors also are firming, which is a good sign for the bulls as we move toward the second half of the session. Still, our sense is that investors are taking a bit of a pause before a heavy influx of earnings reports this week. Too, there was no noteworthy news from the business beat this morning to move the needle heavily in favor of either the bulls or the bears.

As noted, it will be a busy week for earnings, with nine Dow-30 components on the schedule, including Johnson & Johnson (JNJ - Free Johnson & Johnson Stock Report), Goldman Sachs (GS Free Goldman Sachs Stock Report), and UnitedHealth Group (UNH - Free United HealthGroup Stock Report) before tomorrow’s opening bell. Today, asset manager BlackRock (BLK) reported an increase in second-quarter net income, but the result fell short of expectations. The stock, which ran up ahead of the earnings report, is down in intra-day trading. Meantime, there was some non-earnings corporate news this morning. Specifically, reports surfaced that activist investor Trian Fund Management Is launching a proxy battle with Dow-30 component Procter & Gamble (PG - Free Procter & Gamble Stock Report) for more board seats on the struggling consumer goods company. Trian’s leader Nelson Peltz investor believes a shakeup is needed at the company, as cost-cutting efforts have not produced desired results there. Shares of P&G are trading nominally higher today.

Looking ahead to the second half of the session, we don’t see any catalysts to push the major averages notably in either direction. Thus, trading may remain uninspiring into today’s closing bell. There is little news so far today on the healthcare issue that remains the focus of those in power in Washington D.C. The Senate has yet to consider taking a vote to repeal and replace the Affordable Care Act. Any news on that front has the potential to lead to a pickup in trading activity, especially with regard to the healthcare sector. Meantime, the price of oil, which has been a focus of Wall Street in recent weeks, was lower early on in the session, but has retraced most of decline in the last hour. Stay tuned. - William G. Ferguson

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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Before The Bell - The major U.S. equity indexes ended a strong week for those long equities on a very upbeat note on Friday. The broadbased buying resulted in a new all-time high for the Dow Jones Industrials and the strongest showing for the NASDAQ Composite in more than two months. For the session, the index of 30 bellwether companies increased 85 points; the NASDAQ climbed 38 points; and the broader S&P 500 Index advanced 11 points. After a mixed start to Friday’s session, the mid- and small-cap sectors joined the festivities, which, as noted, made it a clean sweep for the bulls.

The move higher came despite some mixed news from both the earnings and economic fronts. On the business beat, retail sales were disappointing and consumer sentiment, as measured by the University of Michigan/Reuters survey, fell to a multi-month low of just above 90. This reading was still good, but came in below expectations. The reading on consumer prices was benign and industrial production increased in June. Our sense is that the economic data created a “Goldilocks” scenario for Wall Street. That is the economic reports were decent enough to not worry investors, but still not good enough to indicate that the Federal Reserve will take a more hawkish posture with regard to interest rates over the second half of 2017. This created an environment for buying.

Indeed, the buying was all encompassing on Friday. All of the major equity groups finished the session in positive territory, with the initially sluggish financial and consumer discretionary stocks eventually joining the party. The leadership came from the higher-yielding equities (i.e., utilities, telecom, and consumer staples) and the commodities issues (i.e., basic materials and energy). The weaker U.S. dollar and the drop in fixed-income yields were the main catalysts for those sectors. Meantime, by session’s end, the consumer discretionary stocks were able to overcome a weak retail sales report and the financials were able to move pass some disappointing commentary from banking giants JPMorgan Chase (JPM - Free JPMorgan Chase Stock Report) and Wells Fargo (WFC), which noted that the near-term outlook for net investment income, a key metric for the banks, is lackluster, given the current rate environment.

Speaking of earnings, the second-quarter reporting season kicks into high gear this week, highlighted by reports from nine Dow-30 companies. The expectations are for earnings growth of around 6% for the S&P 500 companies. Our sense is that Corporate America will have to match or exceed those expectations if the earnings reports are going to give a boost to a stock market where valuations are already stretched. This week will provide many clues as to how the second-quarter earnings season will likely play out. And with the schedule light on the business beat—the only notable report being data on housing starts and building permits—the earnings news will be even more highly scrutinized over the next five trading days.

With less than an hour to go before the commencement of trading stateside, the futures are presaging a modestly higher opening for the U.S. stock market. The main indexes in Asia started the new trading week on a positive note, while the major European bourses are mixed as trading moves into the second half of the session on the Continent. The bulls are looking to pick up where they left off last week, but they may need some help from Corporate America to keep the run going. Stay tuned.   - Harvey S. Katz 

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.