J.P. Morgan Weekly Market Recap – July 21, 2014

My original idea was to post these every week or so. (That didn’t work out too well! ) Many people like to make their own investment decisions and this recap is a great way to gain insight into what is going on globally. This weekly broadcast from J. P. Morgan will give you some insights as to what is going on right now. Here’s the essential text.

The Week in Review
– Retail Sales were weaker than expected
– Industrial Production was soft in June
– Housing Starts fell to 893k and Permits
fell to 963k
– Consumer Sentiment fell slightly in July
The Week Ahead
– Existing Home Sales
– New Home Sales
– US Flash PMI
– Durable Goods

Thought of the Week
The 2Q14 earnings season is under way, and this week will be an important one with 146 S&P 500 companies scheduled to report. By the end of this week, nearly 60%
of S&P 500 by market capitalization will have reported earnings, giving us a good
sense of where things currently stand. Thus far, we have seen many of the big financial sector companies beat earnings estimates; given that financials and technology are the two largest S&P 500 sectors, this suggests that strong profits in the technology space should help actualize current earnings expectations. Turning to the fundamentals, as shown in this week’s chart, the majority of earnings growth we have observed so far this quarter has been a function of margins, as companies continue to operate with as few expenses as possible. Looking forward, however, it is not clear that margins can continue to materially increase, meaning that the baton will need to be passed to revenues in order for earnings to continue pushing higher over the coming quarters.

If you want the full 2 page file, email me and I’ll forward the link to you. Right now it doesn’t want to work properly so I can’t add it to this page. TK