Market Watch – April 20, 2018
Big Picture
By Andrew Trimble
U.S. earnings, economic data in focus
It was a busy week thanks to a full economic calendar and a U.S. corporate earnings season that’s starting to heat up. Thus far, company profits south of the border have been solid among most reporting and if projections hold average earnings among S&P 500 constituents should hit high double digits of about 17%. Turning to economic data, Chinese Q1 GDP growth figures released Monday showed the economy growing a robust 6.8% from a year ago, which equaled the pace in Q4 and Q3 2017. The government’s target for 2018 is 6.5% so it appears the world’s second largest economy is on track to meet its growth goals. Turning to the U.K., the most recent employment data shows the labour market mixed with the number of people looking for work rising but the overall jobless rate unchanged at 2.4%, a near-record low. With regard to consumer prices, Britons witnessed a decline in the price of goods in March to lower the annual inflation rate to 2.5%, well above the BoE’s 2% target rate. Both prints dent speculation regarding an interest rate hike next month. Turning to Canada, the central bank made no adjustments to monetary policy at its regularly scheduled meeting Wednesday. The current overnight rate stands at 1.25% after three recent rate rises. Looking ahead, market watchers will get reads on Canadian retail sales and inflation today.
Markets
Stocks start week strong, fade
A solid start to the U.S. earnings season helped most major U.S stock benchmarks climb into positive territory for the year this week but stocks cooled through Thursday close. For the four days covered in this report, the Dow added 304 pts. close at 24,664, the S&P 500 moved ahead 37 pts. to finish at 2,693 and the Nasdaq gained 132 pts. to settle at 7,238. In Canada, the TSX also had a good week rising 181 pts. to end Thursday’s session at 15,454.
This is my last Market Watch. I thank readers who’ve graced me with their time, interest and feedback over the past five-plus years. Taking the reins is Bill Curry whose first report appears April 27.