Last week, we saw corporations representing about 40% of the S&P 500 index’s value, or more than $7.7 trillion, disclose their earnings results, with more than three-quarters of companies exceeding analysts’ expectations.
U.S. GDP quarterly data was off to a lackluster start for 2017. GDP grew 0.69% annually for the quarter, the weakest performance since the first quarter of 2014. The primary drag on real GDP growth was due to a reduction in State and local government spending and a stagnated consumer spending, though, after 3 strong consecutive quarters of growth. A rebound is expected for the second quarter as residential construction and business spending data has increased.
The Trump administration released a skeleton draft of its fiscal policy, calling for a massive tax reform with cuts both for individuals and businesses prompting rates to edge higher over the week, with the 10-year Treasury increasing 2.55 basis points to 2.287%.
In the upcoming week:
• All eyes and ears will be focused on the Fed, as the committee will meet on Tuesday and Wednesday. While the expectation of a rate hike is quite low, folks will be focused on the Fed’s statement for any clues for what may happen next.
• Moreover, Chairwoman Yellen and Vice-Chairman Fischer both have speaking engagements on Friday as the new blackout period rules no longer preclude FOMC members from making policy comments. Other Fed officials scheduled to speak include Bullard, Evans, and Rosengren.
• U.S. economic data continues to stream in, but most market practitioners will likely pay closer attention to today’s manufacturing data and Friday’s job reports.
• In the EU, while the odds are currently in Macron’s favor, Le Pen’s MLP party, in a bid to pick up more center-right votes, have been softening their anti-Euro message. Investors will keenly await the final round of debate this Wednesday with the final French presidential election to follow on Sunday.
• Regulatory-related changes to the GMEI system regarding Level 2 data requirements on Legal Entity Identifiers go into effect today. The collection of a legal entity’s parent company will be collected. In certain scenarios, you may be able to opt-out of reporting parental entity relationships. Please contact your BMA partner with any questions.
