Current Investment Perspectives
Despite strong earnings reports, the S&P 500 Index fell 0.1% on the week as investors eyed Washington’s ongoing tax negotiations. European stocks also faced pressure, with the Stoxx Europe 600 down 1.2% amid European Central Bank (ECB) President Mario Draghi’s emphasis on patience in the face of subdued inflation (even in light of improved economic growth).
Global equity markets retreated on uncertainty over the prospects for US tax reform and disappointing 3Q corporate earnings reports. The S&P 500 fell 0.2% over doubts that Washington successfully enacts tax reform before 2019. Underwhelming earnings announcements in Europe pushed the Stoxx 600 down 1.8%, while Japan’s TOPIX edged off of its 25 year high but still ended the week up 0.4%.
The S&P 500 lacked a clear trajectory, ending the week roughly flat, as investors processed developments from Washington regarding tax reform and the Fed chair nomination. In Europe, the Stoxx 600 touched a fresh 2-yr. high as stronger cyclical data continued to push up analysts’ earnings expectations for the region. Japan’s TOPIX was up 1.3% with foreign demand for stocks reaching its strongest level in four years, providing a source of technical support for the current rally.
Continue: November 6, 2017 Investment Perspectives