Markets Rebound to Post Slight Gains

Charles Schwab: On the Market

Posted: 11/13/2017 4:15 PM EST

Markets Rebound to Post Slight Gains

 

U.S. equities posted modest gains, bouncing off early lows that came on the heels of declines for international equities on concerns to the likelihood of a successful U.S. tax code overhaul. Treasuries were flat and the U.S. dollar inched higher amid a domestic economic docket void of any major releases today. Gold was slightly higher and crude oil prices diverged. News on the equity front was mixed, as Tyson Foods beat quarterly expectations and GE announced a cut to its quarterly dividend.

The Dow Jones Industrial Average (DJIA) rose 17 points (0.1%) to 23,439, the S&P 500 Index was 3 points (0.1%) higher at 2,585, and the Nasdaq Composite gained 3 points (0.1%) to 6,758. In moderate volume, 791 million shares were traded on the NYSE and 1.9 billion shares changed hands on the Nasdaq. WTI crude oil inched $0.02 higher to $56.76 per barrel and wholesale gasoline was $0.02 lower at $1.79 per gallon. Elsewhere, the Bloomberg gold spot price rose $2.72 to $1,277.79 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.1% at 94.46.

Tyson Foods Inc. (TSN $76) announced Q4 GAAP earnings per share (EPS) of $1.07 or $1.43 ex-items, topping the $1.35 FactSet consensus estimate, while revenues rose 10.8% year-over-year (y/y) to $10.1 billion, beating expectations. The company announced that the adjusted EPS guidance range for 2018 is between $5.70 and $5.85, representing a 7-10% increase over fiscal 2017 adjusted EPS. Shares werenicely higher.

General Electric Company (GE $19) announced that its Board of Directors has determined to set the Company's quarterly dividend to a projected payout of $0.12, or a 50% reduction from the current quarterly dividend of $0.24. The company revealed 2018 EPS guidance of $1.00-$1.07, below the FactSet estimate, while GE is also addressing additional business and strategy updates at the GE Investor Update, currently in session. Shares of GE ae traded solidly lower.

Economic docket blank today

Treasuries were unchanged amid a dormant economic calendar, as the yields on the 2-year and 10-year notes, as well as the 30-year bond were flat at 1.68%, 2.40% and 2.87%, respectively.
Economic reports for the week will begin tomorrow, starting with the National Federation of Independent Business (NFIB) Small Business Optimism Index, forecasted to move higher to a level of 104.0 during October from the 103.0 posted the month prior, followed by the first look at inflation readings in the form of the Producer Price Index (PPI), with economists anticipating a 0.1% month-over-month (m/m) increase for October, while the core rate, which excludes food and energy, expected to have gained 0.2%.

More pricing data will come later in the week via the Consumer Price Index (CPI), while we will also receive a read on the consumer heading into the holiday season in the form Wednesday's retail sales release. Schwab's Director of Market and Sector Analysis, Brad Sorensen, CFA, informs us in his latest Schwab Sector Views: 'Tis the Season…Almost, that personal spending reported by the Commerce Department rose 1.0% in September, which was the largest monthly increase since August of 2009. Retail sales have also been increasing at a relatively steady rate, although there could have been some hurricane-induced volatility recently. Housing activity will also be on display as the NAHB Housing Market Index will be followed by housing starts and building permits, and the Fed's industrial production and capacity utilization report will round out the heavy dose of weekly data.

As noted in the latest Schwab Market Perspective: Incredible, Amazing…Unstop-a-bull?, the long-running bull market continues and has shown few signs of faltering. Even modest pullbacks have failed to gain any momentum and the uptrend has been largely intact throughout the course of 2017. But there are signs that the potential for a “melt up” is heightened. Additional support for the ongoing bull market could come from the holiday shopping season, which is shaping up to be a good one, as well as ramped up capital spending and productivity as discussed by Schwab's Chief Investment Strategist Liz Ann Sonders in her articles, Takin Care of Business: Several Important Kickers for a Strong Capex Cycle and One Thing Leads to Another: Productivity's Rebound.

Europe and Asia find pressure

European equities traded lower, with shares of banks and financial services companies declining as investors remained cautious about the future of tax reform policy in the U.S. In political developments in the region, German Chancellor Merkel entered the final stretch of preliminary talks to form a new government and U.K. Prime Minister May is under renewed pressure after the opposition party accused her of lacking support within her party to deliver the Brexit transition period she's proposed. Market participants will likely be paying close attention to tomorrow's ECB conference on monetary policy communication with central bank panel speakers to include Mario Draghi, Janet Yellen, Mark Carney and Haruhiko Kuroda. In economic news in the region, house prices in the U.K. unexpectedly dipped month-over-month (m/m), though they were higher compared to the same period last year and a report from Germany showed wholesale prices in the country decelerated m/m and y/y. The euro overcome some early weakness and was mostly flat versus the greenback, while the British pound lost ground versus the U.S. dollar and bond yields in the region were mixed. For a look at global stock investing, see Schwab's Chief Global Investment Strategist Jeffrey Kleintop's, CFA, latest article, U.S. vs international: what do earnings tell us about what may be ahead?.

Stocks in Asia finished the first trading session of the new week mostly lower with Japanese equities leading decliners, as stocks in the Asian nation extended their recent losing streak to four sessions after the country's benchmark index reached levels last week not seen in well over two decades. Separately, Japan released a producer price inflation report that came in hotter than anticipated.

Listings in Australia and South Korea traded lower, with the latter seeing pressure from manufacturing companies. Indian securities fell, as market participants speculated whether a plan to lower the tax rate on some goods could increase the country's fiscal deficit and as October consumer price inflation was higher than expected. Meanwhile, stocks in mainland China and Hong Kong bucked the trend by posting modest gains, as China's Ministry of Finance announced that it will extend a tax-exempt proceeds policy for transactions made through the Shanghai-Hong Kong Stock Connect to December 4, 2019. Additionally, the online shopping and spending bonanza in China known as Singles' Day, which took place on November 11, set another record in single day sales at an estimated $25 billion. With volatility relatively flaring up to hamper the global markets, Schwab's Jeffrey Kleintop, CFA, and Randy Frederick discuss in the video, Is An Optimistic Outlook for Global Equities Warranted?.

Tomorrow's international economic calendar will hold retail sales from China and Japan, business confidence from Australia, CPI and GDP from Germany, CPI from the U.K. and Spain, and GDP from Italy.

Financial Review

The Parade Passing By

Sinclair Noe — October 26, 2017

Podcast: Play in new window | Download (Duration: 13:15 — 7.6MB)

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DOW + 71 = 23,400
SPX + 3 = 2560
NAS – 7 = 6556
RUT + 3 = 1497
10 Y + .01 = 2.45%
OIL + .63 = 52.81
GOLD – 11.00 = 1267.20

Cryptocurrency 

• Number of Currencies: 879
• Total Market Cap: $172,874,344,662
• 24H Volume: $3,346,529,813

Top Cryptocurrencies

	Name	Symbol	Price USD	Market Cap	Vol.	Total Vol. %	Price BTC	Chg. % 1D	Chg. % 7D
	Bitcoin	BTC	5,991.9	$99.63B	$1.94B	57.98%	1	+1.73%	+5.04%
	Ethereum	ETH	298.18	$28.44B	$265.63M	7.94%	0.0500608	+1.04%	-3.22%
	Ripple	XRP	0.20235	$7.88B	$37.75M	1.13%	0.0000341	+0.17%	-5.97%
	Bitcoin Cash	BCH	339.20	$5.69B	$238.21M	7.12%	0.0571329	+0.96%	+2.97%
	Litecoin	LTC	55.840	$3.00B	$79.47M	2.37%	0.00935417	+0.59%	-6.11%
	Dash	DASH	285.57	$2.20B	$49.83M	1.49%	0.0483665	+0.47%	-2.46%
	NEM	XEM	0.20044	$1.80B	$4.71M	0.14%	0.00003352	+0.74%	-10.18%
	BitConnect	BCC	219.37	$1.60B	$15.80M	0.47%	0.0368101	+5.91%	+9.88%
	NEO	NEO	28.500	$1.42B	$35.29M	1.05%	0.00475357	+0.28%	-1.88%
	Monero	XMR	88.80	$1.36B	$22.90M	0.68%	0.0148741	0.00%	-0.39%

Up 100, down 100, up 100 then drifting lower. The Dow and the S&P moved higher today. The Nasdaq closed in the red as biotech took a beating. Welcome to earnings reporting season. After the closing bell, we watched a parade of the biggest tech companies report better than expected earnings. Tomorrow, Apple launches iPhone X.

Also, tomorrow the Commerce Department releases its first look at gross domestic product for the third quarter. The consensus is that the economy likely expanded at a 2.6 percent annualized rate in the three months ended Sept. 30, which is in-line with recent history.

Republicans pushed a $4 trillion budget through the House today by a thin margin. For now, Republicans sidestepped divisions within the party by voting 216-212 to permit them to begin work on a $1.5 trillion tax cut without fear of a filibuster by Democrats.

This is just a first step, GOP tax-writers pick winners and losers among interest groups, business sectors and rank-and-file voters. The goal is a full rewrite of the inefficient, loophole-laden tax code in hopes of lower rates for corporations and other businesses and a burst of economic growth.

But evidence is growing that some of their steps — such as eliminating the deduction for state and local taxes or eliminating 401K retirement plans – will face opposition from both sides of the aisle. For the most part, plans for ending various tax breaks — which are key to helping to offset the deep tax-rate cuts that Trump and congressional leaders want to achieve — have been kept under wraps.

Now that the budget blueprint has been adopted, a hard reality will set in as the business community and others realize how much of the tax bill will involve closing loopholes and changing their credits and deductions. In the absence of details on how to pay for those rate reductions, the fight over the SALT deduction is instructive. Repealing the tax break would generate an estimated $1.3 trillion over 10 years. If it’s not fully repealed, lawmakers will have another revenue hole to fill.

Republican Sen. Bob Corker said today that some of the items in the GOP tax reform discussion are just “buying off” special interests and serve no other purpose. Corker said: “Some of the things we’re doing, I’m sorry, are ridiculous,” though he did not mention any specifics.

Corker, a member on the Senate Budget and Banking committees said those things are “not going to drive 1 ounce of economic growth. But it’s what you have to do to pass a tax bill. It’s buying off of people to pass tax reform. … We could take a lot of this off in the trash can and make it easier and actually do something that grows our economy and increases our wages.”

Meanwhile, Democrats united against the plan, arguing its tax cuts will pad the bank accounts of the wealthy and the balance sheets of corporations, while delivering modest relief — or none — to middle-income taxpayers.

Ways and Means Committee Chairman Kevin Brady, R-Texas, said immediately after the vote that he’ll release the tax measure on Nov. 1 and that a panel vote is expected the week of Nov. 6. House and Senate leaders want to pass companion measures before Thanksgiving with a final compromise coming before year’s end. But there are lots of details between now and then.

This afternoon, Trump declared the opioid crisis a public health emergency, stopping short of a national emergency declaration he promised months ago that would have freed up more federal money. The declaration will redirect federal resources and loosen regulations to combat opioid abuse, but it does not mean there will be more money to combat the crisis.

Apparently, it is tough to find money for the opioid crisis and cut corporate taxes at the same time. The Centers for Disease Control and Prevention report more than 54,000 deaths last year attributed to opioid abuse.

European Central Bank President Mario Draghi managed to avoid roiling markets when he detailed the central bank’s plan to cut its monthly bond purchases in half. In fact, bonds and stocks soared while the euro weakened – a perfect outcome for the ECB. Draghi added a bit of a surprise to the plan to pull back from the markets.

Yes, the ECB will cut in half its monthly bond purchases to 30 billion euros from 60 billion euros starting in January, but the bank’s president also indicated that zero percent interest rates could remain at current levels until “well past” whenever it finally decides to end its quantitative easing measures. Maybe 2019, maybe 2020.

Markets seemed to focus on the idea of “lower for longer”. Bonds across Europe rallied hard, with yields on 10-year German bunds tumbling almost 7 basis points to 0.42 percent. The STOXX Europe 600 Index promptly rose the most since August.

Pending home sales showed a decline to a 2½ year low in September, missing consensus estimates for a rise of 0.4%, as the housing market is buffeted by lean supply and strong demand. Meanwhile, the advanced U.S. trade deficit widened by 1.3% in September.

Amazon reported net income of $256 million, or 52 cents per share, for the three months ending Sept. 30. That easily beat the 2 cents per share analysts had expected. Amazon has long been known for investing the money it makes back into its businesses, such as opening new warehouses to fulfill orders.

Many seemed to expect that again. And Amazon did reinvest in the business. It paid nearly $14 billion this summer for organic grocer Whole Foods; announced a series of new voice-activated Echo devices; and kicked off a public hunt for a place to build its second headquarters.

Revenue rose 34 percent to $43.4 billion, beating the $41.5 billion analysts expected. Amazon reported after the bell and shares were up about 8% in after-hours trade. Rite Aid, Express Scripts Holding and Walgreens Boots Alliance all fell sharply after Amazon secured a wholesale pharmacy license.

UPS reported earnings per share of $1.45 for the third quarter. Revenue increased 7%. International profit was up 8.9%; currency neutral profit was up 20%. And they raised guidance for full year 2017. The upcoming holiday period is shaping up to be another record-breaking shipping season. Earlier in the week we told you that online purchases are expected to pass brick and mortar retail purchases this season.

In fact, United Parcel Service (UPS) forecasts 750 million packages will be delivered between Black Friday and New Year’s Eve, a 5% increase from last year. Despite the expected increase in volume, UPS expects to hire the same number of temporary seasonal workers as last year (95,000). The difference is UPS will be using more technology to streamline operations.

Alphabet beat projections for third-quarter sales and earnings after a surge in Google ad volume helped the web-search giant shrug off concerns about regulatory scrutiny and an expensive foray into hardware. Sales for the quarter rose 24% to $22.2 billion and profit was $9.57 a share, beating estimates of $8.34.

In September, the deadline arrived for Google to meet demands for the European Union antitrust case on shopping ads. Google agreed to tweak its paid search results for products in the continent, although it’s still appealing the charges. These product ads have helped drive sales and profit growth, but Google investors are more concerned about a probe into Google’s Android software on mobile devices, where Google’s ads are growing.

Also in September, Google agreed to pay $1.1 billion for about 2,000 engineers from HTC Corp, in effect an acquisition of skilled hands to expand Google’s line of Pixel smartphones. The new hardware business is a pillar of Google’s fight against Apple. Revenue from a segment labeled Other Revenue, which includes hardware, was up 39%. Alphabet share gained about 3% in after-hours trade.

Intel beat Wall Street estimates for the quarter and raised its outlook for the year. Intel reported third-quarter net income of $4.5 billion, or 94 cents a share, beating estimates of 80 cents per share. Revenue rose to $16.1 billion from $15.7 billion. Intel was up about 1.6% in after-hours.

Microsoft posted better-than-expected quarterly results. The company reported its fiscal first-quarter earnings rose to $6.5 billion, or 84 cents a share – topping estimates of 71 cents per share. Revenue grew 12% to $24.5 billion, beating estimates. Microsoft up about 4.5% in after-hours, trading at all-time highs.

Ford Motor rose 1.9% after the auto maker beat profit and revenue estimates.

Bristol-Myers Squibb shares fell 4.8% after the company missed on profit and revenue and changed its 2017 guidance.

Nutrisystem  continued to slide, falling 10.5%, despite turning in better-than-expected quarterly earnings.

Celgene plummeted 16.4% after the company reported a third-quarter profit beat and revenue miss and lowered its 2017 profit and revenue outlook. The stock pressured the overall biotech and health-care sectors.

The $9.5 billion iShares Nasdaq Biotechnology ETF tumbled as much as 2.9 percent. The biggest exchange-traded fund tracking the biotech industry is headed toward its longest losing streak since September 2015, falling for seven days in a row. Just a reminder, biotechs led a market selloff about 2 years ago.

Tenet Healthcare shares tanked 9.2% following a Reuters report that the hospital operator has ended its plan to sell itself after its chief executive abruptly left ahead of schedule.

The Wall Street Journal reports CVS Health has made a proposal to buy Aetna for more than $200 per share, a deal that could value the health insurer at upward of $66 billion.

Gains Taper Near Close

Charles Schwab: On the Market

Posted: 10/26/2017 4:15 PM EDT

Gains Taper Near Close

 

After being higher for most of the day, the U.S. stock markets finished mixed, with gains in the tech sector on Twitter's quarterly results being tempered by health care issues following a disappointing outlook from Celgene. Treasury yields were higher amid mixed economic data, including a disappointing pending home sales report, while the U.S. dollar rallied with the euro seeing pressure in the wake of the European Central Bank's decision to cut and extend its stimulus measures. Crude oil prices were higher and gold was lower.

The Dow Jones Industrial Average (DJIA) rose 72 points (0.3%) to 23,401, the S&P 500 Index increased 3 points (0.1%) to 2,560, while the Nasdaq Composite was 7 points (0.1%) lower at 6,557. In moderate volume, 875 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq. WTI crude oil added $0.46 to $52.64 per barrel and wholesale gasoline gained $0.01 to $1.70 per gallon. Elsewhere, the Bloomberg gold spot price lost $11.30 to $1,266.23 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 1.1% higher at 94.70.

Twitter Inc. (TWTR $20) reported a Q3 net loss of $0.03 per share, or earnings-per-share (EPS) of $0.10 ex-items, versus the $0.06 FactSet estimate, as revenues declined 4.0% year-over-year (y/y) to $590 million, above the projected $587 million. The company said daily active users grew 14.0% y/y and monthly active users rose 4.0%. TWTR issued Q4 operating earnings guidance that topped forecasts. Shares rallied.

Comcast Corp. (CMCSA $36) posted Q3 earnings of $0.55 per share, or $0.52 ex-items, versus the projected $0.49, with revenues declining 1.6% y/y to $21.0 billion, compared to the forecasted $21.1 billion. CMCSA's video subscribers fell but by a slightly smaller amount than expected. The company said it increased operating earnings despite the impact of the severe storms and the uneven comparison due to the Rio Olympics. Shares finished lower.

Ford Motor Co. (F $12) announced Q3 EPS of $0.39, or $0.43 ex-items, compared to the expected $0.33, as automotive revenues rose 0.9% y/y to $33.6 billion, above the forecasted $33.0 billion. F raised the low end of its full-year EPS outlook. Shares were higher.

United Parcel Service Inc. (UPS $119) reported Q3 EPS of $1.45, in line with forecasts, as revenues grew 7.0% y/y to $16.0 billion, above the expected $15.6 billion. The company cited the impact of natural disasters, but said it saw balanced shipment growth and yield expansion, while its international profit rose solidly. UPS raised the low end of its full-year earnings outlook. Shares were higher.

Shares of Celgene Corp. (CELG $100) tumbled after the company lowered its 2017 revenue outlook and its long-term guidance for 2020, due to certain market dynamics and recent pipeline events. The updated guidance accompanied its Q3 earnings report, which showed revenues were softer than expected as sales of its psoriasis drug Otezla severely missed estimates. This also comes as the company announced last week that its highly-anticipated drug for Crohn's disease failed a late-stage trial.

In late-day action, the Wall Street Journal reported that CVS Health Corp. (CVS $73) was in talks to acquire Aetna Inc. (AET $179). Neither company commented on the headline. Shares of AET rallied on the news, while CVS was slightly lower.

Jobless claims rise

Weekly initial jobless claims (chart) rose by 10,000 to 233,000 last week, but below forecasts of an increase to 235,000, with the prior week’s figure being revised higher by 1,000 to 223,000. The four-week moving average dropped by 9,000 to 239,500, while continuing claims decreased 3,000 to 1,893,000, north of estimates of 1,890,000.

The advance goods trade deficit widened slightly more than expected to $64.1 billion in September, from the upwardly revised $63.3 billion in August, and compared to expectations of $64.0 billion.
Preliminary wholesale inventories increased 0.3% month-over-month (m/m) in September, versus forecasts for a 0.4% increase, and following August's downwardly revised 0.8% rise.

Pending home sales were flat m/m in September, versus projections of a 0.5% rise, and following the negatively-revised 2.8% drop registered in August. Compared to last year, sales were 5.4% lower, versus estimates of a 4.2% drop. Pending home sales reflect contract signings and are used as a gauge of the pipeline of existing home sales, which unexpectedly rose in September.

The Kansas City Fed Manufacturing Activity Index for October unexpectedly showed growth (a reading above zero) accelerated, with the index rising to 23, versus forecasts for it to remain at September's 17 level.

Treasuries were lower, as the yields on the 2-year and 10-year notes, as well as the 30-year bond, were all 2 basis points higher at 1.62%, 2.45% and 2.96%, respectively.

The U.S. dollar rallied as the euro dropped in the wake of the monetary policy decision from the European Central Bank (ECB). Bond yields and the U.S. dollar have received some support from continued global economic and earnings optimism, most recently yesterday's solid gain in durable goods orders, as well as relative optimism regarding tax reform.

Tomorrow, the economic calendar will culminate with the first look (of three) at Q3 GDP, projected to show growth slowed a bit to a quarter-over-quarter (q/q) annualized rate of 2.6%, from the 3.1% pace seen in Q2, with personal consumption decelerating to a rise of 2.1% from 3.3%. Although the hurricanes are likely to have some impact, growth is projected to remain steady and post the best two-quarter performance since early 2015, per Bloomberg. The final University of Michigan Consumer Sentiment Index is also slated for release, with economists anticipating a reading of 101.1, matching the preliminary report, but above the 95.1 posted in September.

Schwab's Chief Investment Strategist Liz Ann Sonders notes in her article, Trying to Reason With Hurricane Season: The Aftermath of "Harma," that we expect to see a boost in economic activity associated with the recovery/rebuilding efforts. Liz Ann also points out in her latest article, Takin Care of Business: Several Important Kickers for a Strong Capex Cycle, that U.S. business capital spending (capex) has already picked up; but an even sharper recovery could be in the cards for 2018, while tax reform—if we get it—would be an additional kicker courtesy of the proposed 100% depreciation allowance. She adds that the pick-up in capex is a relatively new bright spot for the U.S. economy; and in 2018 it will likely be a shining characteristic of the latter innings of an economic expansion.

Europe higher as ECB trims and extends stimulus measures

European equity markets traded higher, with the euro seeing solid pressure versus the U.S. dollar as the European Central Bank announced following its monetary policy meeting that it will cut its bond buying program in half in January. However, the ECB said it will extend the time frame for its purchases to September, with the possibility of another extension if needed, while committing to a substantial reinvestment of maturing debt in 2018 and for an extended period. The announcement came as the ECB left rates unchanged and the markets paid close attention to President Mario Draghi's customary press conference that followed the decision, in which he appeared to foster a dovish takeaway regarding his views on the inflation and eurozone economic growth. Schwab's Jeffrey Kleintop, CFA, offers analysis of the global monetary policy front in his article, How the Shift by Central Banks May Affect the Stock Market. Bond yields in the region were lower following the ECB's announcement. The British pound also saw some pressure. Spanish stocks led the way, rallying on eased concerns toward the Catalonia turmoil.

Stocks in Asia finished mixed following the declines in the U.S. yesterday, while the markets digested a flood of diverging earnings reports and awaited the monetary policy decision out of the eurozone from the ECB. Japanese equities gained modest ground, rebounding after snapping a 16-day winning streak yesterday, with some upbeat earnings reports helping overshadow strength in the yen. Schwab's Liz Ann Sonders discusses with Randy Frederick in the video, Tracking Sentiment: Are Investors Too Optimistic About Stocks?. Stocks in mainland China advanced, but those traded in Hong Kong decreased, while a disappointing earnings report from the semiconductor sector weighed on South Korean securities, despite the nation reporting stronger-than-expected Q3 GDP growth. Finally, markets in Australia and India advanced.

Tomorrow’s international economic calendar will offer CPI and PPI from Japan, PPI from Australia, retail sales from Spain and housing prices from the U.K.

Financial Review

Ain’t That a Shame

Sinclair Noe — October 25, 2017

Podcast: Play in new window | Download (Duration: 13:16 — 7.6MB)

Subscribe: Android | RSS

DOW – 112 = 23,329
SPX – 11 = 2557
NAS – 34 = 6563
RUT – 6 = 1493
10 Y + .04 = 2.44%
OIL – .30 = 52.17
GOLD + .90 = 1278.20

Cryptocurrency

• Number of Currencies: 877
• Total Market Cap: $169,285,401,598
• 24H Volume: $3,480,700,406

Top Cryptocurrencies

	Name	Symbol	Price USD	Market Cap	Vol.	Total Vol. %	Price BTC	Chg. % 1D	Chg. % 7D
	Bitcoin	BTC	5,724.2	$95.79B	$1.96B	56.46%	1	+3.89%	+3.75%
	Ethereum	ETH	295.25	$28.50B	$324.79M	9.35%	0.0521385	-0.35%	-3.81%
	Ripple	XRP	0.20140	$7.89B	$75.54M	2.17%	0.00003573	-0.90%	-4.77%
	Bitcoin Cash	BCH	328.42	$5.56B	$151.70M	4.37%	0.0579792	+1.87%	-0.16%
	Litecoin	LTC	56.330	$3.03B	$114.68M	3.30%	0.00985888	+1.29%	-5.54%
	Dash	DASH	287.59	$2.21B	$43.80M	1.26%	0.0504281	-0.88%	-2.25%
	NEM	XEM	0.20435	$1.86B	$4.19M	0.12%	0.00003598	+0.22%	-5.94%
	BitConnect	BCC	206.31	$1.51B	$16.86M	0.49%	0.0359821	+6.59%	+6.15%
	NEO	NEO	28.650	$1.43B	$35.32M	1.02%	0.00498411	-4.06%	-2.93%
	Monero	XMR	87.90	$1.34B	$59.61M	1.72%	0.0153379	-0.63%	-1.22%

The Dow and S&P 500 suffering their worst day in seven weeks. Even though overall earnings results have been beating estimates, we had a string of disappointments today.

Burrito chain Chipotle and chip maker AMD (that’s computer chips – not chips and salsa) were the S&P 500’s two biggest losers. Chipotle posted weaker-than-expected earnings late Tuesday, sinking 15%, while AMD’s results beat expectations, but investors seemed more concerned about the company’s outlook, which may not have been as strong as hoped. AMD shares dropped 13%.

Well, that’s how it goes during earnings reporting season. Yesterday investors cheered the early results from third-quarter corporate earnings, equity investors had a change of heart. Third quarter earnings are not expected to shine; with consensus forecasts of profit growth coming in at less than half the 10 percent or so seen in the first two quarters of 2017.

As we move through earnings – pay attention to guidance. The actual earnings have already happened. The market tries to look to the future.

Amgen reported higher-than-expected third quarter profit as lower research and other costs and improved operating margins helped offset sales declines in some of its biggest established products. The world’s largest biotechnology company also raised its full-year adjusted earnings forecast.

Nike posted its weakest quarterly sales growth in nearly seven years in September. Nike said it expects earnings per share to grow in the mid-teens over the next five years, driven by online sales and new product categories, sending its shares up by about three percent. The stock was the top gainer on the Dow today.

Coca-Cola topped profit and revenue estimates for the third quarter on a 3 percent rise in North American sales, gaining market share over arch rival Pepsi. Over the course of several years, both companies have shifted their strategy, focusing on selling low-calorie versions of their colas and buying healthier beverage brands, as consumers move away from sugary sodas.

But Coke seems to be winning the so-called cola-wars by adopting a more aggressive approach to selling juices, teas and vitamin water and taking the lead on franchising its bottling operations to cut costs.

Boeing racked up a further $329 million charge for its troubled KC-46 aerial refueling tanker program. Boeing raised its full-year earnings and cash flow forecasts as it beat third-quarter earnings estimates and reported higher margins in its main commercial airlines segment and overall business.

But the new charge on the air tanker, which some analysts had speculated could return to haunt Boeing despite assurances to the contrary in April, meant the program has now lopped a total of about $1.9 billion off the company’s net income after tax. Boeing share dropped about 4%.

Durable-goods orders rose 2.2% in September. Excluding transportation orders increased 0.7%. Business investment advanced 1.3% for the third month in a row, based on a closely followed measure known as core capital-goods orders. These orders have climbed 7.8% in the past year, the fastest pace since early 2012. The rise in orders last month was concentrated in commercial aircraft, military hardware and electronics.

New-home sales ran at a 667,000 annual pace in September, an 18.9% increase compared with August, and a 17% increase compared with a year ago. This is one of those economic reports that tends to include month-to-month static. For the year to date, sales are 8.6% higher compared to the same period last year.

In September, the median sale price was $319,700, compared to $314,700 a year ago. At the current sales pace, it would take 5 months to exhaust all available supply. More homes are crucial for a market starved for inventory.

Tomorrow, the European Central Bank unveils its plan to scale back purchases of bonds under its quantitative easing program. The consensus is that monthly bond purchases will be cut in half to 30 billion euros ($35 billion) for most of next year. So, any amount that differs from that number is likely to roil markets. Investors will also be listening for President Mario Draghi’s comments on the future path of interest rates.

Nobody expects the ECB’s Governing Council to announce a rate hike tomorrow, suggesting that the central bank is likely to reiterate that rates will “remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases.” The longer the QE horizon the stronger the guidance will be, but a rate hike is unlikely before mid-2019 regardless of whether QE is extended for six or nine months.

Legislation to fund cost-sharing reduction payments – or CSRs – to health insurers would save the U.S. government $3.8 billion over a decade – that, according to a new analysis from the Congressional Budget Office. Trump signed an executive order to cut off CSR funding this month, citing concerns about their legality.

The CBO score of the bill may improve passage odds for the bipartisan legislation authored by Sens. Lamar Alexander, a Tennessee Republican, and Patty Murray, a Washington Democrat. The bill would reinstate cost-sharing reduction payments owed to insurers for lowering deductibles for the next two years.

It would also allow more customers to purchase a cheaper high-deductible plan and make some small changes in the way states can apply for federal waivers to tweak their health care system. Insurers have already signed contracts to offer plans with significantly higher premiums in 2018 in response to the White House’s ambiguity on CSR payments.

The CBO previously found that ending CSR payments permanently would increase deficits by $194 billion over a decade, since insurers would raise premiums for Obamacare exchange plans by 20 percent in response and the government would have to spend more on subsidies to help customers pay them. The savings are lower in the new Alexander-Murray score largely because it uses a baseline that assumes the CSR payments will be made.

Also tomorrow, The House of Representative is slated to vote to formally back the Senate’s budget resolution, fast-tracking the GOP’s effort to advance a tax overhaul with a simple majority in the Senate. With passage, Republicans would unlock the powerful legislative tool known as reconciliation, which replaces the Senate’s 60-vote threshold with a simple majority in some circumstances.

Opposition from some moderate House Republicans to a proposal that would abolish state and local tax deductions is inserting some last-minute drama. Bloomberg reports Representative Tom MacArthur of New Jersey said he thinks there are more than 20 House Republicans who would vote against a key budget resolution, if a “reasonable” compromise isn’t reached on preserving the state and local tax break in some form.

MacArthur added that he didn’t think the House should hold its scheduled vote on the budget Thursday unless an agreement on the so-called SALT deduction has been reached. House GOP members concerned about the break are supposed to meet with Republican leaders this evening.

House Republicans hold 239 seats and need 217 votes to adopt the budget — a critical step to passing tax changes without Democratic support. That means 23 defections could sink the budget resolution — assuming no absences or Democratic support.

When it comes to tax reform, SALT (or state and local tax) deductions may be just one of many stumbling blocks. Once Obamacare repeal failed, the only major item on Republicans’ agenda for the rest of the year was supposed to be tax reform.

But then Trump announced his administration planned to sunset the Deferred Action for Childhood Arrivals program, and that it would end the Affordable Care Act’s subsidy payments, a move that will increase premiums for Americans and dig a deeper hole in the national deficit. Congress also keeps putting off negotiations on key policies, like the now-expired federal Children’s Health Insurance Program (CHIP). With so many policy deadlines, the possibility of a shutdown can’t be dismissed.

In the final hours of Tuesday night, the Senate voted to nullify a rule that would’ve allowed customers of banks, credit-card companies, and other financial institutions to join together in class-action lawsuits if they felt they’d been wronged.

The rule—which was introduced in July by the Consumer Financial Protection Bureau (CFPB), but was not yet in effect—would have prevented financial institutions from forcing customers with legal grievances to resolve them out of court with the company’s lawyers, in a process called arbitration.

Buried in the fine print for credit card applications and banks accounts and such is a clause that requires consumers to submit to arbitration if there is a problem. But the problem for consumers is that arbitration can be cumbersome and costly. The mandatory arbitration clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up.

The Senate’s nullification of the rule came about even as recent major financial-industry scandals have harmed consumers. Wells Fargo, even with its fake-account and auto-lending scandals, utilized mandatory-arbitration clauses in some of the agreements they have customers sign.

The nullification of the CFPB’s rule means that people who suffered financial harm or identity theft as a result of either of these large companies’ lapses may not have the right to take them to court. It was a huge win for banks, who feared a flood of costly lawsuits.

But for financial firms already under the spotlight for poor treatment of customers, the bad publicity may make it difficult for them to avoid court. For example, Equifax initially turned to arbitration clauses in the face of its cyber hack but public pressure and threats from state attorneys general forced it to drop the requirement for 145.5 million consumers affected by the breach.

Markets Notch Gains Amid a Flurry of Data and Events

Charles Schwab: On the Market

Posted: 10/13/2017 4:15 PM EDT

Markets Notch Gains Amid a Flurry of Data and Events

 

U.S. equities finished out the week higher, getting a boost from a 13-year high in consumer sentiment and solid retail sales. Technology issues caught a draft from HP's favorable guidance, while healthcare issues came under pressure as the Trump administration cut cost-sharing subsidies. Treasury yields were lower on cooler-than-expected inflation data and the U.S. dollar finished nearly unchanged, while crude oil prices moved higher in the wake of President Trump’s decision not to certify the Iran nuclear deal. 

The Dow Jones Industrial Average (DJIA) increased 32 points (0.1%) to 22,872, the S&P 500 Index added 2 points (0.1%) to 2,553, and the Nasdaq Composite gained 14 points (0.2%) to 6,606. In moderate volume, 769 million shares were traded on the NYSE and 1.7 billion shares changed hands on the Nasdaq. WTI crude oil increased $0.85 to $51.45 per barrel and wholesale gasoline was $0.04 higher at $1.62 per gallon. Elsewhere, the Bloomberg gold spot price added $9.74 to $1,303.46 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was flat at 93.08. Markets were higher for the week, as the DJIA gained 0.4%, the S&P 500 Index added 0.3% and the Nasdaq Composite increased 0.2%.

Bank of America Corp. (BAC $26) reported Q3 earnings-per-share (EPS) of $0.48, versus the FactSet estimate of $0.46, with revenues rising 1.0% year-over-year (y/y) to $21.8 billion, compared to the expected $22.0 billion. Net interest income topped forecasts and trading revenues were above expectations despite falling, while loans grew and the company cut expenses more than anticipated. BAC was higher.

Wells Fargo & Co. (WFC $54) posted Q3 EPS of $0.84, or $1.04 ex-items, compared to the projected $1.02, as revenues declined 2.0% y/y to $21.9 billion, versus the estimated $22.4 billion. The company's net interest margin came in well below expectations and loans missed estimates. Shares were solidly lower.

HP Inc. (HPQ $22) rallied after the company issued its fiscal 2018 earnings outlook at its analyst day that had a midpoint above expectations. HPQ said it is looking to aggressively focus on pockets of growth in its stabilized core businesses and expand its 3-D printing solutions to include metal for mass-production manufacturing.

The healthcare sector saw some choppiness, led by hospital and managed-care stocks, after President Trump and his administration announced that they will cut off Affordable Care Act cost-sharing subsidies.

With earnings season heating up, Schwab's Director of Market and Sector Analysis, Brad Sorensen, CFA, offers a look at all the major market sectors in his latest, Schwab Sector Views: Sustainable Energy?, on the Market Commentary page at www.schwab.com. Follow us on Twitter: @schwabresearch.

Retail sales rise, consumer inflation cooler than expected, consumer sentiment jumps

Advance retail sales (chart) for September rose 1.6% month-over-month (m/m), compared to the Bloomberg forecast of a 1.7% gain and compared to August's positively-revised 0.1% decline. Last month's sales ex-autos were up by 1.0% m/m, versus expectations of a 0.9% gain, and following the favorably revised 0.5% increase seen in the previous month. Sales ex-autos and gas rose 0.5% m/m, compared to estimates of a 0.4% rise, and versus August's upwardly revised 0.1% gain. The retail sales control group, a figure used to help calculate GDP, grew 0.4%, matching projections, and the prior month's positively revised flat reading. Auto and gas sales rose solidly, along with building materials, while sales of food and beverages, clothing, at restaurants and online all moved higher. Electronics and appliances, furniture, health and personal care, and sporting goods sales categories were down.

The Consumer Price Index (CPI) (chart) gained 0.5% m/m in September, versus estimates calling for a 0.6% gain, while August's 0.4% rise was unrevised. The core rate, which strips out food and energy, was up 0.1% m/m, versus expectations for it to match August's unrevised 0.2% rise. Y/Y, prices were 2.2% higher for the headline rate, below forecasts of a 2.3% rise, while the core rate was up 1.7%, south of projections of a 1.8% increase. August y/y figures showed unrevised 1.9% and 1.7% rises for the headline and core rates, respectively.

The preliminary University of Michigan Consumer Sentiment Index (chart) surged to a 13-year high of 101.1 in October from the prior month's 95.1 level, and compared to expectations for it to dip to 95.0. The current economic conditions and expectations components of the report both jumped. The 1-year inflation forecast fell to 2.3% from September's 2.7% rate, while the 5-10 year inflation outlook dipped to 2.4% from 2.5%.

Business inventories (chart) rose 0.7% m/m in August, in line with forecasts, and versus July's upwardly revised 0.3% increase.

With inflation garnering more attention, Schwab's Chief Investment Strategist Liz Ann Sonders discusses putting traditional measures of inflation back on the radar screen in her article, The Waiting: Wage Growth and Inflation Finally Getting in Gear?, and Schwab's Chief Global Investment Strategist Jeffrey Kleintop, CFA, offers analysis of inflation in a global monetary policy perspective in his commentary, Inflation May Be The Biggest Question For Investors In 2018.

Global monetary policy focus remains, with Europe appearing to lean more hawkish and the Fed continuing down the normalization path amid leadership uncertainty, and Jeff discusses, How the Shift by Central Banks May Affect the Stock Market, and talks in the video with Vice President of Trading and Derivatives, Randy Frederick, Should a Change in Fed Leadership Matter to Investors?.

The political front remained in focus, as in midday action President Trump announced that he will not certify the nuclear deal with Iran, while Washington continues to grapple with tax reform, as discussed by Schwab's Vice President of Legislative and Regulatory Affairs, Michael T. Townsend, in his article, Tax Reform Framework Released, But The Road Ahead Is Long.

Check out these articles and video on the Market Commentary page at www.schwab.com. Follow our Schwab experts on Twitter: @lizannsonders, @jeffreykleintop, @kathyjones and @randyafrederick.
Treasuries finished higher on the inflation data, as the yield on the 2-year note declined 2 basis points (bps) to 1.50%, the yield on the 10-year note fell 4 bps to 2.28%, and the 30-year bond rate dropped 3 bps to 2.82%.

Europe mixed following U.S. data, Asia mostly higher as Japan extends rally

European equities finished mixed, though a sharp jump in Chinese exports bolstered the basic materials sector. The markets digested today's cooler-than-expected U.S. inflation data and countering retail sales and consumer sentiment reports. As such, the euro and British pound gained modest ground on the greenback to apply some pressure on the markets. A mixed response to key U.S. banking sector earnings reports and declining bond yields weighed on financials. Bond yields saw pressure amid reports suggesting the European Central Bank is considering extending its bond-buying program for at least nine months after it starts tapering stimulus measures, per Bloomberg.

U.K. Brexit uncertainty remained, with a stalemate continuing as a fifth round of negotiations wrap up. Political uncertainty also festered as Spain is pushing Catalonia for clarification on whether or not it declared independence, while recent Italian confidence votes were digested. For analysis, see Schwab's Jeffrey Kleintop's, CFA, and Randy Frederick's video, Political Risk: How Should Investors Respond?, and our article, Brexit Begins: What's Next for the U.K?, on the Market Commentary page at www.schwab.com.

Stocks in Asia finished mostly higher to close out the week, with recent upbeat global economic optimism continuing to buoy sentiment, while Japanese stocks extended a rally to levels not seen in over two decades. Schwab's Jeffrey Kleintop, CFA, and Randy Frederick discuss in the video, Are Investors Underestimating the Stock Market Rally?, on the Market Commentary page at www.schwab.com. Stocks in China and Hong Kong ticked higher on a mixed September trade report, which showed exports rose at a rate that was below forecasts but imports topped expectations. Markets in Australia and India advanced, with the latter gaining on the heels of late-yesterday's upbeat inflation and industrial production reports. After the closing bell, India reported that its exports for September rose solidly. Finally, South Korean equities finished lower.

Stocks tick higher on the week amid mixed data and uncertainties

U.S. stocks posted a fourth-straight weekly gain as Q4 continued to roll on, with data fostering continued global economic optimism to support sentiment and overshadow festering global political and monetary policy uncertainties. Treasury yields and the U.S. dollar slipped after recent rallies on a cooler-than-expected read on consumer price inflation, pared optimism as the markets grapple with the long road to tax reform, and volatility across the pond on a Brexit stalemate and lingering Spanish political uncertainty. As such, real estate and utilities led to the upside, while financials were hampered. Banks also saw pressure as earnings reports from Dow member JPMorgan Chase & Co. (JPM $96) and Citigroup Inc. (C $72) topped expectations but signs of rising credit costs and the continued drop in trading revenues appeared to foster concerns. Telecommunications issues fell solidly amid continued concerns toward the sector, exacerbated by AT&T Inc's (T $36) warning that its Q3 results were negatively-impacted by the hurricanes and heightened competition. Consumer staples were among the best performers, aided by Dow member Wal-Mart Stores Inc's (WMT $87) $20 billion share buyback plan and outlook for sales. The positive global economic mood helped materials issues gain ground. Crude oil prices moved higher to help lift the energy sector.

Although ramped up earnings season will likely command a great deal of the market’s attention, next week's economic calendar will bring a flood of reports to be scrutinized, with housing playing a major role. The NAHB Housing Market Index will be followed by housing starts and building permits, and the week will culminate with existing home sales. The docket will be rounded out with the releases of industrial production and capacity utilization, the Fed's Beige Book, the Leading Index and the Import Price Index.

As noted in the latest Schwab Market Perspective: Preparing for the Latter Innings, U.S. stocks continue to grind higher, with little appearing able to knock them off course. The possibility of a pullback always exists but a melt up is also reemerging as a real possibility. Earnings tend to drive equity market direction, and the next few weeks should help set the tone for market action for the rest of the year. Expectations came down a bit as we entered reporting season and recent robust economic data gives support to the potential for companies to meet and/or beat estimates. Global economic growth continues to improve, which should help support both domestic and global stock markets. Read more on the Market Commentary page at www.schwab.com.

International reports due out next week that deserve a mention include: Australia—employment change. China—lending statistics, CPI and PPI, Q3 GDP, retail sales and industrial production. Japan—industrial production and trade balance. Eurozone—trade balance, new car registrations, CPI and construction output, along with German investor confidence. U.K.—inflation statistics, employment change and retail sales.

Stocks Mixed as Storms Eyed

Charles Schwab: On the Market

Posted: 9/8/2017 4:15 PM ET

Stocks Mixed as Storms Eyed

U.S. stocks traded mixed as the markets paid attention to developments pertaining to Hurricane Irma, while financials advanced as Treasury yields mostly rebounded from a recent drop. The U.S. dollar was again under pressure and a dip in crude oil prices pressured energy shares though tech listings led decliners. In other equity news, Equifax traded lower in the wake of its announced massive cybersecurity breach. Gold was lower.

The Dow Jones Industrial Average (DJIA) increased 13 points (0.1%) to 21,799, the S&P 500 Index was 4 points (0.1%) lower at 2,462, and the Nasdaq Composite decreased 38 points (0.6%) to 6,360. In moderate volume, 801 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq. WTI crude oil fell $1.61 to $47.48 per barrel and wholesale gasoline lost $0.01 to $1.65 per gallon. Elsewhere, the Bloomberg gold spot price was $2.49 lower at $1,346.74 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly 0.4% lower at 91.33. Markets were lower for the holiday-shortened week, as the DJIA decreased 0.9%, the S&P 500 Index lost 0.6% and the Nasdaq Composite fell 1.2%.

Equifax Inc. (EFX $123) announced a cybersecurity incident potentially impacting approximately 143 million U.S. consumers, occurring from mid-May through July 2017. Data accessed primarily includes names, Social Security numbers, birth dates, addresses and, in some instances, driver's license numbers. In addition, credit card numbers for approximately 209,000 U.S. consumers, and certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers, were accessed. The company added that it has found no evidence of unauthorized activity on Equifax's core consumer or commercial credit reporting databases. Shares finished sharply lower.

Kroger Co. (KR $21) reported Q2 earnings-per-share (EPS) of $0.39, in line with the FactSet estimate, as revenues grew 3.9% year-over-year (y/y) to $27.6 billion, above the projected $27.5 billion. Q2 same-store sales grew 0.7% y/y, versus the 0.4% rise that was anticipated. KR reaffirmed its full-year EPS outlook. Shares were under pressure, as analysts expressed concern about the heightened uncertainty in the food retail market as the company said it will no longer provide longer-term guidance "In this dynamic operating environment."

Target Corp. (TGT $57) found pressure after the retailer posted a blog about lowering prices on thousands of items in its stores.

Consumer credit and wholesale inventories rise 

Consumer credit, released in the final hour of trading, showed consumer borrowing expanded by $18.5 billion during July, above the $15.0 billion forecast of economists polled by Bloomberg, while June's figure was adjusted slightly lower to an increase of $11.8 billion from the originally reported $12.4 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, rose $15.9 billion y/y, while revolving debt, which includes credit cards, increased by $2.6 billion.

Wholesale inventories (chart) were revised higher to a 0.6% month-over-month (m/m) gain for July, versus the Bloomberg forecast of an unrevised preliminary 0.4% increase. This was the third-straight month posting a 0.6% increase. However, sales dipped 0.1% m/m, after June's downwardly revised 0.6% gain, and compared to the expected 0.5% rise. The inventory-to-sales ratio—the amount of time it would take to deplete inventories at the current sales pace—ticked higher to a 1.30 months pace from June's 1.29 rate.

Treasuries finished mostly lower, with the yield on the 2-year note nearly unchanged at 1.27%, while the yields on the 10-year note and the 30-year bond gained 2 bps to 2.06% and 2.67%, respectively.

Treasury yields rebounded from a recent bout of pressure that had taken them to levels not seen since November, while the U.S. dollar continued to drop to lows not seen in over two years. Fed rate hike expectations for this year have slipped and the European Central Bank signaled that it is likely to unveil plans to dial back its stimulus measures at its meeting next month. Moreover, geopolitical and U.S. political uncertainties remain, while last week's Hurricane Harvey is being followed by a plethora of storms in the Atlantic, with Hurricane Irma continuing to track toward Florida.

Schwab's Chief Fixed Income Strategist Kathy Jones notes in her article, What's the Bigger Risk: Bond Market Bubble or Complacency?, we think bond yields are likely to rise from current levels as the economy continues to improve and the Federal Reserve tightens policy, but we don’t see a bubble in the market. Read more on the Fixed Income page at www.schwab.com, and for analysis of investing styles, see Schwab's Chief Investment Strategist Liz Ann Sonders' latest article, Radioactive II: Could the Tide Finally Be Turning for Active vs. Passive?, on the Markets & Economy page. Follow Kathy and Liz Ann on Twitter: @kathyjones and @lizannsonders.

In the final hour of trading, the economic calendar will bring the release of consumer credit, expected to show consumer borrowing was $15.0 billion during July, up from the $12.4 billion posted the month prior.

Europe battles back as data and currencies in focus, Asia mixed following data 

European equity markets overcame early losses and finished mostly higher, as financials gained ground with bond yields in the region rebounding from recent pressure. The euro was relatively calm after an extended rally to levels versus the U.S. dollar not seen in well over two years. The European Central Bank (ECB) and the markets have shown some concern regarding the euro's recent surge, which was amplified by yesterday's ECB monetary policy decision that signaled plans to scale back stimulus measures could come next month. Also, the outlook for the possibility of a Fed rate hike this year has become more cloudy to bolster gains for the euro. A mixed trade report out of China, softer-than-expected German export growth, mixed industrial/manufacturing production data out of France, and relatively favorable U.K. industrial/manufacturing production were also in focus. The British pound gained solid ground on the U.S. dollar, likely weighing on the U.K. markets. Amid this backdrop, see Schwab's Chief Global Investment Strategist Jeffrey Kleintop's, CFA, latest article, U.S. vs international: what do earnings tell us about what may be ahead?, on the Markets & Economy page at www.schwab.com, and his video with Vice President of Trading and Derivatives, Randy Frederick, Is An Optimistic Outlook for Global Equities Warranted?, on the Insights & Ideas page. Follow Jeff and Randy on Twitter: @jeffreykleintop and @randyafrederick.

Stocks in Asia finished mixed to close out the week, with data showing Chinese exports missed forecasts but imports—a potential sign of growth in domestic output—topped forecasts, while Japan's Q2 GDP growth was revised to a slower pace of acceleration from Q1. Also, currency volatility garnered attention, with the yen extending a rally as the U.S. dollar continued to drop, hitting the strongest level versus the greenback since November, while currencies in China strengthened to help developers and airlines, per Bloomberg. Global monetary policy uncertainty after yesterday's ECB decision and as Fed rate hike expectations slip is bolstering the volatility. Tensions toward North Korea continued to fester to keep sentiment on edge, along with the potential impact of a plethora of hurricanes in the Atlantic. Schwab's Jeffrey Kleintop, CFA, notes in his article, Missiles and Markets: An investor guide to geopolitical risks investors should avoid overreacting to geopolitical developments and stick to their long-term financial plans. Read more on the International Investing page at www.schwab.com. 

Weekly gain streak ends as storms, currencies, and yields garner attention

U.S. stocks failed to extend a weekly winning streak to three as a plethora of sources of market anxiety stymied conviction. Financials came under pressure as Treasury yields fell to November lows, while the U.S. dollar tumbled to levels not seen since early 2015. Global monetary policy uncertainty lingered, as Fed rate hike expectations for this year continued to fade, the ECB hinted that detailed discussions regarding tapering are set to commence, and the Bank of Canada unexpectedly hiked rates. Just as the markets were recovering from Hurricane Harvey's impact, Irma crushed the Caribbean and tracked toward Florida.

Geopolitical concerns remained as North Korea detonated a hydrogen bomb and was reportedly preparing another ICBM test, while U.S. President Trump continued to push for global trade renegotiations. Dysfunction on the domestic political front persisted as President Trump backed a Democratic bill lumping a short-term debt limit extension to avoid a government shutdown with Hurricane relief, which passed through Congress but appeared to make some Republican Congressional members uneasy. Upbeat global economic data was overshadowed, with upbeat services sector reports out of China, the eurozone, U.K. and the U.S. having little impact. Healthcare issues led to the upside, bolstered by a plethora of upbeat experimental drug trial results, and energy stocks moved higher as crude oil prices paused from a recent tumble.

Next week, while assessing the impact of Irma and grappling with the aforementioned uncertainties, the economic calendar will likely regain some focus. Stubbornly low inflation, which has kept Fed rate expectations hamstrung, will be on display courtesy of the releases of the Consumer Price Index (CPI) and Producer Price Index (PPI) for August. The all-important U.S. consumer will also garner attention as the markets digest the August retail sales report and the preliminary September University of Michigan Consumer Sentiment Index. The docket will also bring the NFIB Small Business Optimism Index, JOLTS Job Openings, and industrial production and capacityutilization.

As noted in the latest Schwab Market Perspective: A Preview of Coming Attractions?, action is about to heat up as summer comes to an end but investors should remain cool. Geopolitical threats, domestic politics, and Federal Reserve actions all have the potential to add to volatility and heightens the risk of a pullback or correction. But healthy economic growth and strong corporate earnings lead us to believe that the bull market has legs. Read more on the Markets & Economy page at www.schwab.com.

International reports due out next week that deserve a mention include: Australia—consumer confidence and employment change. China—CPI, PPI, lending statistics, retail sales and industrial production. India—trade balance, CPI, PPI and industrial production. Japan—machine orders and industrial production. Eurozone—industrial production, new car registrations and trade balance, along with German CPI. U.K.—CPI, PPI, employment change and Bank of England monetary policy decision.