Weighing The Week Ahead: The Real-Time Economic Lesson Continues

It is a light economic calendar in a holiday-shortened week. Political headlines and the government shutdown will dominate financial news. Earnings reports are more important for investors, so we should focus there. I also recommend several key themes. We should all be watching closely as….

The Real-Time Economic Lesson Continues.

I hope we can analyze stocks instead of political controversies in the week ahead.

Last Week Recap

In my last edition of WTWA I asked whether earnings reports would change the gloomy “message” of the markets. That was the right question, and earnings seem generally in line with continuing modest economic growth.

John Butters (FactSet) reports on the earnings season so far, with 11% of the S&P 500 reporting. The earnings “beat rate” is 76% and the revenue beat rate is 56%. The growth rate is currently 10.6%. On the negative side is the movement in 2019 forecasts. Estimates for the first half of the year have declined 4.5%, more than the recent average decline of 2.4%. Here is a chart showing the movement in both estimates and price over the last few months.

Brian Gilmartin notes that year-over-year growth for 2019 is now expected as 5.5%. He also breaks down the market by sector size, showing the impact of each.

The Story in One Chart

I always start my personal review of the week by looking at a great chart. This week I am featuring Jill Mislinski. She includes a lot of relevant information in a single picture – worth more than a thousand words. Read the full post for more great charts and background analysis.

Stocks gained 2.9% with another week of lower volatility. The trading range was barely higher – same as last week. You can see the results compared to some past data in our indicator snapshot (below).

Noteworthy

Trade issues are paramount in the list of global economic concerns. There are many misunderstandings about the impacts of current trade policies as well as possible changes. Visual Capitalist highlights five important ways that globalization is changing. The complete infographic provides details about the surprising changes:

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