Last Week:

Markets eke out a win last week. On Friday, the Dow was up +250 and the S&P was up +34. If Friday hadn’t finished strong, it would have been a nasty week.

Markets fought off what was perceived as a negative Fed meeting report. In the good news is bad news category the Fed thought that the economy will exceed its December forecast. That means the Fed is likely to keep raising interest rates, so the “punchbowl” will continue to gradually be taken away.

So how many times will the Fed raise rates this year? I’ve heard a number of reports and most feel rates will go up 3 if not 4 times. To those that are concerned about this I have two responses. First, the Fed raised rates 3 times in 2017, and the markets shrugged it off. Second, “emergency” rates are for emergencies and we are certainly not in an emergency situation. Another way to put it: rates are beginning to “normalize”.

Existing home sales in January were down -3.2%. They are down -4.8 year-over-year.

This Week:

The economic focus of the week: Will markets go up, or will they go down? Uncertainty is still the main concern as we enter this week.

The Queen of Hearts contest remains a big center of attention in the Cleveland area. Only six cards are left. If the ticket that’s drawn for the right card number (either #20, 28, 30, 45, 49 or 50) and has the Queen of Hearts behind it, it wins the jackpot. Last week the jackpot was $2.4 million. It’s likely to hit $3 million this week. Costs a $1/ticket to enter. The drawing takes place on Wednesday night at 7:30pm.

A key moment this week will most likely take place on Wednesday morning when the second read on Q4’s GDP comes out. The prior read came in at +2.6%. Expectations are for it to drop a touch down to +2.5%.

Earning season is almost over. Companies reportingthis week: Barnes & Noble, Best Buy, Gap, JCPenney, Kohl’s, Lowes, Macy’s, Monster Beverage, Office Depot, Papa John’s Pizza, and Xenia Hotels & Resorts.

Indicator focus: January’s new home sales (Mon); January’s durable goods orders, January’s international trade, February’s consumer confidence (Tue); Q4’s 2nd read on GDP (Wed); and February’s ISM manufacturing index (Thu).

Have a great week,


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