Weekly Market Update – Oct. 22, 2018

Last Week

  • Global equities fell slightly last week with a small 0.1% loss. Emerging markets (-0.8%) led global equities lower while developed ex-U.S. equities fell slightly (-0.2%) and U.S equities were flat.
  • A summit in Europe failed to produce an agreement on the UK’s departure from the European Union in March 2019. A follow-up meeting in November is planned to help finalize a deal.
  • Meeting minutes from the September Federal Reserve meeting indicated that the Fed remains on a path to gradually increase interest rates. The minutes did not contain any major surprises, but were less hawkish overall than recent comments made by Fed Chair Jerome Powell.
  • Japan Prime Minister Shinzo Abe announced a consumption tax increase from 8% to 10% beginning in October 2019
  • So far, 70 S&P 500 companies (14.0%) have reported results. Overall earnings growth (22.1% year-over-year) remains ahead of the pre-earnings season estimate and near the level observed in the prior quarter.

This Week

  • A majority of the companies reporting this week will come out of the industrials and communication services sectors
  • Many of the major non-U.S. countries reporting flash manufacturing Purchasing Managers’ Index figures this week expect further growth deceleration from the beginning of the year
  • In Thursday’s meeting, the European Central Bank will likely confirm its plan to end asset purchases by the end of 2018, after already halving its monthly purchase amount to €15 billion in early October

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