The Week Ahead | 05/13/2019

Recent Developments and Headlines

Well, last week we saw Volatility come back to the market because of the Trade War, VIX increase 19% to close at 16.04 up from 12.87 last Friday. The market rallied late in the trading sessions on most days this week. The SPX closed at 2881.40. The trade war is far from over.

When Volatility comes, focus on the process to not let your emotions make your trades.

Now that the Trade War will be put to the back burner, what will the market look at this week. Most will be looking back here in the US at the Political stalemate that is forming.

Happy Monday. Good Luck out there this week.

Global Spotlight

Back to Trade War Territory. Although the U.S.-Chinese trade negotiation is on the rocks once again, it is still very much alive. The tactic used by U.S. President Donald Trump of piling on tariffs over a last-minute negotiations logjam was not particularly shocking.

The White House Corners Iran. In the course of a week, Iran has announced its intent to pull back from some of its commitments under the Joint Comprehensive Plan of Action nuclear deal, the United States has deployed a carrier and bomber task force to the Persian Gulf, piled sanctions on metals on top of energy and financial sanctions, and circulated leaks that Iran has authorized militant proxies to attack U.S. targets.

Deja Vu in North Korea. North Korea is firing off missiles once again, having broken its long flight-test hiatus this week. But the launches do not mean that North Korea has broken its promises to the U.S. and South Korea: Pyongyang maintained these two sets of tests carefully within the confines of its de facto moratorium on launches of long- and intercontinental-range missiles.

Meanwhile, in Venezuela. A week after an attempted opposition uprising fizzled, Venezuela’s government is striking back. The government arrested the deputy head of the opposition-controlled legislature as well as a high-ranking National Guard general who supported the uprising. Several opposition legislators have sought refuge in foreign embassies to escape the crackdown.

Eyes on Turkey. Turkey’s ruling Justice and Development Party (AKP) is going to do whatever it takes to eke out a win in the June 23 rerun of the Istanbul mayoral election now it has succeeded in winning a ruling invalidating the opposition Republican People’s Party candidate’s March 31 victory in the longtime AKP stronghold.

Economic Calendar has a good U.S. economic calendar for the week. Here are the main U.S. releases.


Last Weeks Numbers

Review Last weeks numbers here.




Aggregate Estimates and Revisions

  • First quarter earnings are expected to gain 1.3% from 18Q1. Excluding the energy sector, the earnings growth estimate is 2.7%.
  • Of the 448 companies in the S&P 500 that have reported earnings to date for 19Q1, 75.4% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 76%.
  • 19Q1 quarter revenue is expected to increase 5.6% from 18Q1. Excluding the energy sector, the revenue growth estimate is 6.2%.
  • 56.9% of companies have reported 19Q1 revenue above analyst expectations. This compares to a long-term average of 60% and prior four quarter average of 67%.
  • For 19Q2, there have been 48 negative EPS preannouncements issued by S&P 500 corporations compared to 19 positive, which results in an N/P ratio of 2.5 for the S&P 500.
  • The forward four-quarter (19Q2 –20Q1) P/E ratio for the S&P 500 is 16.7.
  • During the week of May 13, 9 S&P 500 companies are expected to report earnings.

Thomson Reuters I/B/E/S

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