A Lot of Smoke, Not Much Fire
We got a lot of information, but little light on the direction of economic activity this week.
The S&P 500 Index broke its seven-week winning streak, falling about 1% this holiday-shortened week. Earnings news this week again dominated the economic data.
Although earnings news was generally positive, the reports were not quite good enough for investors, especially when it came to banks. However, news out of the tech and industrial sectors remained surprisingly strong. Businesses appear to be back in investing mode, spending on computers and industrial capital goods.
News out of the manufacturing sector continued to improve, at least based on the Empire State and Philly Fed manufacturing reports. Initial unemployment claims, thankfully, dropped back after last week's holiday-related spike, which should bode well for January's all-important employment report.
Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.