The Week Ahead – Bulls on Parade

Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

After a pretty solid earnings season so far, we finally saw the market break out of its funk, having its best week since March. So far over 90% of S&P 500 companies have reported earnings and first quarter earnings growth is on track to be the best in 7+ years. It’s not all just lower corporate taxes from tax reform, however, as growth in pre-tax profits has been +13% year-over-year, and pre-tax profits have beat expectations by 3%. Along with strong earnings, we’ve seen the CBOE Volatility Index, the VIX, drop back down to 13, the level it was at in late January, right before the wild swings of volatility. Can April continue that trend?

In the week ahead, we’ll have a pulse check on the real estate landscape mid-week with housing starts and new building permits. We’ll close the week with an update from the Conference Board’s leading indicators which has managed to see positive gains each month so far in 2018. Just as important, the conference finals for NBA basketball have started with the Celtics holding serve against the Cavaliers! Can the Warriors do the same with the Rockets?

Data deck for May 12 – May 18: