Last Week:

Markets momentum continues. The fourth week of the New Year showed continued strength.

Chalk 2017’s economic growth up to less regulation. President Obama created many of those regulations with the stroke of a Presidential pen, and President Trump has removed them in a similar way. Business folks (certainly not the politicians) from both sides of the isle have been applauding.

The first read on Q4 2017’s GDP came in under consensus, but it was still a good number. The expected range was for growth somewhere between +2.2 – +3.3. Consensus was for +2.9%, and one of my favorite economists (Brian Wesbury) had forecasted +3.3%. The number actually came in at +2.6%.

If you add up all the GDP quarters for 2017 (Q1=+1.4%; Q2=+3.1%; Q3=+3.2%; Q4=+2.6%), you get an average of +2.575%. 2016 came in at +1.9%. So, that growth of +0.675%. Remember, for every tenth of increase it’s a gain of $250 Billion to the Treasury. That’s an increase of new Treasury revenue of almost $1.7 Trillion. That folks… is great news.

Durable Goods were up +2.9% in December. The consensus had been for a gain of +0.6%, so the result was a big (positive) surprise.

Existing home sales declined -3.6% in December. But existing home sales are up just over 1% year-over-year.

New home sales fell -9.3% in December. But year-over-year, they are up +14%.


This Week:

The first economic focus of the week: will come on Friday morning at 8:30am when we get the new jobs and unemployment numbers. The jobs number is expected to rebound from only 148,000 last month up to 176,000. Unemployment is expected to remain at 4.1%.

The second economic focus of the week: will come on Wednesday afternoon when the statement from the first Fed meeting of the year is released. This is Janet Yellen’s final FOMC meeting. No changes are expected at this meeting.

Companies reporting this week: Alphabet, Amazon, Amgen, Apple, AT&T, Boeing, Chevron, Cigna, Clorox, Corning, Daimler, Deutsche Bank, eBay, Eli Lilly, Exxon Mobil, Facebook, Ferrari, Harley-Davidson, Hershey, Honda, Lincoln National, Lockheed Martin, MasterCard, Mattel, McDonald’s, Merck, MetLife, Microsoft, Parker-Hannifin, Pfizer, Phillips 66, Qualcomm, Ralph Lauren, Royal Dutch Shell, Sirius XM, Sony, Time Warner, Tupperware, UPS, US Steel, Valero, Volvo, and Xerox.

Indicator focus: January’s ISM manufacturing index (Thu); January’s jobs and unemployment numbers, January’s consumer sentiment, and December’s factory orders (Fri).


Have a great week,

Chris

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