The three leading US stock indices are at record levels. US earnings season is in the final stretch: 410 companies have reported in the S&P500, with about 67% beat earnings estimates approximately 40% of the sales forecast.
Companies are expected to show growth of 4% in sales and 5% in net earnings growth compared year-on-year.
Government bond markets in developed countries remained relatively stable. The yield on 10-year bonds of the US government stood at 2.41%.
The economic data released this week in the different parts of the world were relatively good. JP MORGAN Global Purchasing Managers Index remained stable and positive, the US and Europe has shown a trend of expansion in economic activity.
Good data released in the US in real estate, employment and confidence indices. The CPI was higher than expected. Simultaneously published in a given weak retail sales in the UK.
The leading US economic indicators indicate high optimism among consumers and businesses: real estate market adds to warm up and inflation data for January were higher than expected, with an increase of 0.6% in the CPI overall and 0.3% in the core index.
Fed interest rate: Economic activity comment and rising inflation are increasing the chances of a rate hike as early as March. The speech of Fed Chairman, Janet Yellen, did not rule out this possibility.
The dollar gained this week against most major currencies, including against the euro following publication of positive economic data in the United States. Accordingly, the euro weakened against the shekel, and the representative rate fell to a low of 15 years. Weakening of the euro is mainly due to political uncertainty in the “Euro-Land”, ahead of elections in France .
Trump was forced to remove his national security adviser because of his association with Russia before the elections. At the same time, Trump enjoys the confidence of the majority of the public in its conflict with the media and the courts.
Increasing tension in US-Russia relations, improved relations between and the United States, the European Union and NATO, all as a result of the political positions of the American foreign minister and defense minister.
The global equity market is expected to face several key challenges in 2017, including the uncertainty surrounding the policies of President Trump and the ways in which these policies may be applied; the gaining strength of Eurosceptic right-wing parties in Western Europe, heading towards elections in the Netherlands, France, and Germany; the ability of Japan and Europe to present stable inflation and growth rates as a backdrop for the activity of the central banks; and the effect of the expected monetary restraint in the US on the currency basket.
Consumer Discretionary (IYC, XLY)- In view of the increase in income disposable light of the planned reform of the individual income tax.
Energy (XLE) – In view of the removal of environmental regulation, and support activities Locally.
Finance (VFH, XLF, KBE) – In view of the credit growth, net interest income, operating expense structure and quality of credit portfolios that show consistent improvement. Easing regulation of the financial system, improving consumer sentiment, expected reduction of corporate and income taxes, disposable income and the improvement in revenue funding as a result of the increase in interest rates, supports in investment in the financial sector to the near future.
Technology (QQQ, IGV, FDN) – In light of conflicting effects on the bottom line of corporate tax reduction, on the one hand, and increasing regulatory supervision of the sector, on the other.
MSCI Europe / S & P Europe 350 (hedged) – In view of the positive effect of the expansionary monetary policy of the ECB on the profits of multinational companies (HEDJ).
Germany (hedged) – In view of the increase in revenues of export-oriented light of the weakness of the euro against the dollar (DXGE).
UK (hedged) – In view of the interest rate cut and positive growth and postponement of exit from the block will benefit private spending of leisure (DXPS).
Nikkei2225 (hedged) – In view of the monetary and fiscal expansion parallel to support the weak currency profits of exporters (DXJ).