Plenty of Grist for the Market Mill This Week

Monday, January 30, 2017

Plenty of grist for the mill of the markets this week, including Personal Income & Spending today, news from the Bank of Japan’s policy meeting tomorrow, news from the latest Federal Reserve meeting Wednesday, and, of course, the heart of Q4 earnings season. For a comprehensive account of these and many more events this week, check out Zacks Chief Strategist John Blank’s latest Global Market Ahead: 4 Good Reasons to Focus on the USA

Personal Income & Spending showed a gap of 2 percentage points: income grew 0.3% in December (analysts had expected 0.4%) while spending ran hotter at 0.5%. Income in November was revised from unchanged to +0.1%. Because we’re talking about fractions of percentage points, none of this is extremely “newsy” at the moment, although in aggregate over time we may see some patterns emerging, and of course we’d prefer to see incomes rise as much as spending, if possible.

No big names are reporting earnings until ExxonMobil XOM Tuesday morning and Apple AAPL after the bell tomorrow, although we will hear from a couple Zacks Rank #2 (Buy) companies like BofI Holding BOFI and Heritage Oaks HEOP. Other big firms like Facebook FB and Amazon AMZN will report later in the week.

It will be interesting to see how the market interprets — if it decides to interpret — events developing out of the White House over the weekend, including an executive order from President Trump to ban Muslim citizens from the U.S. from seven predominantly Muslim countries. The Trump Rally had been priced for perfection, after all, and abrupt actions such as these often have a way of seeing the markets hit the brakes a bit.

Of course, the market may instead simply focus on the here and now: the proposed tax cuts and deregulation should still provide a windfall for publicly traded companies, if not in the immediate term then sometime down the road. But the divisiveness that appears to be promoted by President Trump may add a new wrinkle into the proceedings. Market futures are down in the pre-market: S&P 500 -7.5, Dow -58 and Nasdaq -16.

Mark Vickery
Senior Editor

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