PWM Connect Magazine | Issue no. 2 | June 2018
July 24, 2018
Weekly Market Focus 06 August 2018
August 8, 2018
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Weekly Market Focus 30 July 2018

So far, 265 companies in the S&P500 have reported earnings and the year on year growth. These have been roughly in line with the price performance for cyclical sectors with some exceptions like the Industrials segment. Price performance of defensive sectors like Utilities and Telecom trailed despite positive earnings growth because of sequential improvement in GDP growth for the period.

 

In the second quarter however, Real Estate and Utilities shares have rebounded with the former being the best performing sector (excl. Energy), an indication of a phase transition in markets. The Real GDP growth of 2.84% YOY for the US last week further confirmed a possible mini-cycle peak due to higher base effects going forward and this is supported by slowing manufacturing PMIs. Furthermore corporations like Facebook and Amazon, which beat earnings expectations indicated slowing revenue growth, a further positive for defensive sector stocks.

 

As the US economy slows the FED will be focused on inflation, a lagging indicator, which is a sign that their proverbial rear view mirror is alive and well.

Disclaimer: The research report has been prepared for information purposes and does not constitute an offer. While reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and the company accepts no liability whatsoever for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this report.

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