It was a mixed week for stocks, with the S&P 500 declining 0.1% to 2,274, while the Nasdaq Composite rose 1% to 5,574, another new all-time high.
The J.P. Morgan Health Care Conference took place during the week, allowing companies from various segments of health care to update investors on new developments and financial outlooks. Zimmer Biomet (ZBH), for example, guided Q4 sales higher than consensus and sees earnings at the upper end of prior guidance. Stryker (SYK), another medical device maker, also noted that it sees full-year EPS at the high end of their 2016 goal.
Earnings season began on Friday as a number of banks reported results. JP Morgan (JPM) reported a large beat on earnings and a strong balance sheet. CEO Jaime Dimon believes the U.S. Economy may be building momentum and that growth would be spurred by rational policy from the new administration. PNC Bank (PNC) posted a solid beat of estimates and built a bullish case for 2017 on the back of two expected Fed rate hikes. The company's financial statements are very clean and nicely leveraged for help from the Fed. Lastly, Bank of America (BAC) noted that the recent rise in interest rates came too late to provide a noticeable boost to Q4 results, but the bank expects a significant increase in Net Interest Income (NII) in Q1.
U.S. Economic data remains encouraging, with Producer Price Index (PPI), Retail Sales, and Consumer Sentiment released on Friday. PPI rose 0.3% in December mostly due to food and energy. This gain lifts the y/y rate to +1.6%, a moderate move in the right direction. Retail sales gained 0.6%, driven nearly all by auto sales and gasoline. Finally, Consumer Sentiment held strong at a cycle high of 98.1.
Next week, investors will digest quarterly reports from a large number of companies across most sectors. In addition, there will be data released related to housing, industrial production, and consumer prices.