Week in Review
Favorable earnings and some decent economic news trumped tragic events in the Ukraine and continued turmoil in the Mid East. After a 161 point drop in the Dow Industrials on Thursday, the market took an upward turn on Friday closing the week ahead by 0.92%. The broader S&P 500 moved higher by about half that rate and the NASDAQ was up only 0.38%. Most market sectors were higher except for utilities, consumer staples and healthcare; surprisingly as these tend to be the safe haven sectors investors flee to during times of uncertainly. Even remarks by Fed Chair Janet Yellen to Congress couldn’t deter the bulls. On Capitol Hill, she said monetary accommodation is still appropriate unless the labor-market improves. Thanks for clearing that up. She also decided to volunteer a 1996 Alan Greenspan-esk comment about stock price valuations being “stretched” in some market sectors like social media and biotechnology. Not an opinion you necessarily want to hear from the head of the Federal Reserve during testimony to the Senate on monetary policy. Perhaps she can pick a few stock names for us too while she’s at it. Anyway . . .
. . . It was nice to see positive news on results from some of the big money center banks for a change such as Goldman Sachs, Morgan Stanley, Bank of America and buttonwoodproject aggressive choice JPMorgan Chase & Co. (NYSE: JPM – $58.23), as I believe these companies are economic bellwethers for better things to come. This week we will get a slew of earnings reports including McDonald’s on Tuesday expected to have earned $1.44 for the second quarter vs. last year’s $1.38. Also on Tuesday we will hear from Coca-Cola ($0.63 vs. $0.63), Verizon ($0.90 vs. $0.73), DuPont ($1.70 vs. $1.70) and Kimberly-Clark ($1.50 vs. $1.41). Later in the week we will get results from QUALCOMM for its third quarter ($1.22 vs. $1.03), Dow Chemical’s second quarter ($0.72 vs. $0.64), and 3M Co. ($1.91 vs. $1.71). And finally, United Parcel Service (NYSE: UPS – $103.82) said it plans to open nine new operating facilities in Sao Paolo, Brazil, increasing the country-wide network by 78% to reach more than 200 cities. The logistics and parcel delivery company said it will also increase the size of its ground fleet to 115 vehicles in Sao Paolo. And for the second time in five months, UPS will boost its competitive advantage by expanding its coverage area for early morning deliveries in the U.S. The company will add another 766 UPS Next Day Air Early A.M. ZIPs beginning July 21 after adding more than 400 earlier this year. The Early A.M. service is the earliest morning delivery from UPS, guaranteeing service to more than 87 percent of U.S. businesses. Conservative candidate United Parcel Service is expected to report second quarter earnings on July 29 of $1.25 vs. $1.13 in Q2 2013.
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