Views From The Hill

View From The Hill: Earnings Still In Driver’s Seat

By J Clinton Hill, Capital Markets Strategist @ Hillbent.com

Market Commentary: July-28-2016

bulls-and-bears4Earnings reports are still driving and supporting the market. Today’s economic data provided no significant surprises. Jobless Claims were slightly higher than expected but still at historically low levels with actual numbers @ 266k vs estimates @ 264k and prior @ 253k. On the brighter side of things, the 4-week moving average dipped lower to 256.5k vs. 257.75k.

Overall, US stocks are still the best game in town and things could actually get even better if the earnings recession has truly bottomed. Yardeni Research shows analysts projecting 2016 profits @ $118 for the S&P 500 and @ $135 in 2017. If there is any validity to this, it could build a fundamentally solid level of support @ 2000, which would equal a 14.8x forward multiple for 2017. This market stills remains overbought, but any pullbacks will likely find support. Bear in mind that the market is constantly looking forward. Whether Brexit will have any impact on this outlook remains to be seen, but the US economy and markets are the least exposed to the its fallout. Just something to ponder…

 

SPY weekly chart
Click to enlarge

 


ETF Performance Summary: July-28-2016

Please refer to the table below for our asset class performance summary. There will be no further comments this evening.

 

vfth-etf-summary-7-28-2016
Click to enlarge

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *