Many of the more mature economies have reported slowing growth including Germany, Italy – as well as some of the other European Union members -, Japan and even emerging-market China. And sanctions against Russia are doing no favors for some companies including many American multi-nationals such as Deere, Schlumberger and McDonald’s and France’s Total, S.A. Hence, any news coming out of the Ukraine can jolt the markets, as we saw on Friday when the Dow Industrials plunged 200 points over the course of two hours, before buyers stepped in and the average retraced 150 points by the close. And Treasury yields plunged to their lowest levels in more than a year as investors scurried to safety and into ten-year notes that hit a yield of 2.3% at one point. However, for the week the Dow was able to move higher by 0.7% and the S&P 500 Index rose 23 points or 1.2%. The tech-heavy NASDAQ was the biggest gainer with a 2.2% advance. All but the oil and gas sector had a positive week, lead by healthcare, technology and consumer staples. In portfolio news, Deere & Co. reported better than estimated results, but lowered its outlook; Applied Materials posted better than expected numbers for its third quarter lifting the shares by nearly 8% on the week; and Coca-Cola surprised investors with its Monster Beverage accord and posted a five-session gain of $1.43. Looking ahead, we will get results on Friday from aggressive candidate Foot Locker where it is forecast to earn $0.54 vs. $0.46 for the second quarter of last year amidst a peaked retail showing of late by some of the majors, such as Macy’s and Nordstrom. So it will be interesting to see how well the retailer of athletic footwear and apparel performed and its outlook for the remainder of the year. Tensions between the Ukraine and Russia and troubles in the Middle East will be the focus for the market this week and volume will remain low as we head into the final months of the summer.
“We are retaining our optimism on the equity market, even as the winds of international conflict continue to blow across the world.” The Value Line Investment Survey