November 06, 2017

A light calendar for economic data should leave the market focused on President Trump’s Asian trip, tax reform negotiations, Saudi Arabia’s “anti-corruption” roundup, and the last of high-profile names reporting earnings, Prudential’s Chief Market Strategist Quincy Krosby said Monday in her weekly “Connecting the Dots” outlook.

This earnings season is winding down but there are still important names reporting this week including Disney, Marriott, Macy’s, Nordstrom and Nvidia. The Broadcom bid for Qualcomm is also being watched to measure the appetite for large-scale takeovers. “The earnings that have been coming in this season are solid,” she said. “The market is clearly rewarding companies that have positive forward guidance but also top-line revenue growth coming in.”
 
In the broader picture of geopolitical news, President Trump’s Asian trip will capture headlines as the president seeks to push for increased U.S. sales to the region and to shore up a coalition, particularly with China, to increase pressure on North Korea to come to the negotiating table over its nuclear program, Krosby said.

The surprise Saudi “anti-corruption” campaign over the weekend has investors wondering how this will ultimately play out, as top officials and a well-known Saudi investor in many U.S. corporations remain in custody.
 
“Keep your eye on the oil markets to see if this drives the oil prices higher,” Krosby said.
 
In Washington, the tax reform package is working its way through the “markup” period, which is typically affected by heavy lobbying efforts to include—and keep out—legislation by competing vested interests. The period is due to end on November 13.
 
“What seems to be the most important for the market is the corporate tax rate and the repatriation of overseas cash,” Krosby said.
 
This week’s key economic data will include the Job Opening and Labor Turnover report on Tuesday which may give an anecdotal sense of whether wages are moving up, and the University of Michigan consumer sentiment report on Friday.
 
To talk to Quincy Krosby about her views of the market, contact Lisa M. Bennett or Dara Scerbo.


Read Quincy Krosby’s full Q4 Market Commentary: The End Game

 

The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This is solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.
 
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Contact(s)

Lisa M. Bennett
phone 973-802-2894

Dara Scerbo
phone 973-367-9318