Weekly Market Snapshot1

News Last Week

  • Science Applications International reported mixed fiscal first-quarter earnings. Profits beat forecasts but revenue was weaker-than-expected and shares dropped — down around 12% in after-hours trading Monday — as a result.
  • H&R Block reported stronger-than-expected profits and revenue for the fiscal fourth quarter resulting in a share price jump of almost 11% mid-week. H&R Block attributed the results to cost-cutting during the busy tax season.
  • Boeing announced plans to divide their defense, space, and security operation into three smaller units. In 2016, those operating units were responsible for almost one third of Boeing’s total revenue. In conjunction with the restructuring, it will cut approximately 50 executive positions.
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  • The planned merger of Dow Chemical and DuPont has been cleared by the Justice Department. The merger deal is on track to close in August 2016.
  • The five largest U.S. technology stocks: Apple Inc., Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Facebook Inc. experienced significant market capitalizations drop this week. The combined fall equaled about $120 billion.
  • The slide was again led by sector heavyweights Apple and Alphabet, as investors moved away from what had been the year’s best-performing sector and rotated portfolios into stocks that pay higher dividends amid some signs that U.S. economic weakness.
  • Amazon announced a deal to purchase Whole Foods for $13.7 billion. The announcement of the deal lead to falling share prices for several grocers including Kroger, Costco and Supervalu.
  • Tuesday: Producer Price Index for Final Demand (PPI-FD) for May was unchanged over the previous month and is up 2.4% year-over-year.
  • Wednesday: Consumer Price Index (CPI) for May decreased 0.1%. Excluding the more volatile categories of food and energy the index is up 1.9% year-over-year.
  • Wednesday: Retail Sales for May decreased unexpectedly by 0.3% compared to consensus estimates of 0.1% increase.
  • Wednesday: The Federal Reserve raised short-term interest rates 25 basis points to a range of 100-125 basis points. Janet Yellen, Chair of the Federal Reserve, confirmed the likeliness that the Federal Reserve would make one more rate hike in 2017 and three hikes in 2018.
  • Thursday: Industrial Production for May did not change month-over-month. The consensus estimate was for a 0.2% increase.
  • Friday: Housing Starts for May fell unexpectedly to 1.092 million annualized units versus a consensus estimate of 1.223 million units. Housing permits — a longer-term indicator — were reported to be 1.168 million annualized units.
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News Next Week

  • This week seven Federal Reserve board members make public speaking appearances
  • Wednesday: Existing Homes Sales for May will be reported at 10:00am
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  • Friday: New Home Sales for May will be reported at 10:00am

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