Stocks and High-Yield Bonds finished the week slightly up, while Treasuries slipped lower.
The S&P 500 reached a new high on Monday, but closed flat for the week at 2,183. Mixed U.S. data included an unchanged CPI for July and strong Housing Starts and Industrial Production. The Federal Reserve's meeting minutes, released Wednesday, gave no clear signals about the timing of another rate hike. The door is still open for a hike in September or December, but the Fed members continue to have mixed views.
A handful of retailers reported earnings, including Home Depot (HD) posting a nice beat, Lowe's (LOW) coming in below estimates, Target (TGT) lowering full-year guidance, and Wal-Mart (WMT) easily topping expectations.
Overall, second quarter earnings season is ending, with results from 474 or 95% of S&P 500 members already out. According to Zacks Research, total earnings for these companies are down 3.3% on flat revenues compared to the same period last year. Seventy-two percent beat EPS estimates and 53.8% came in ahead of top-line expectations. The year over year trend in revenue and earnings continued to improve when compared to the prior four quarters.
Markets expect the trend of improvement to continue, with both revenue and earnings estimates showing year over year growth in the fourth quarter.