 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Friday's Headlines 1. The Market Reaches Record Highs 2. Earnings, Earnings, and Earnings 3. On the Economic Side 4. Global Markets Strong Overall
Markets Closed
Year-to-Date
 Stock Indexes Shoot to Record Highs The past week has all been about the Federal Reserve and the future path of interest rates. Fed Chair Jerome Powell testified before both House and Senate committees this past week, giving dovish-leaning testimonies for both. Expectations that the Fed is leaning increasingly towards lower interest rates has helped boost markets to new all-time highs.
On Friday, all three of the primary benchmark large-cap indexes—the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite—hit new record highs, closing at or very near their intraday highs. That's some pretty intense bullishness.
We're hoping for the best, but preparing for downside risks as earnings results and guidance from key companies start rolling in. It's all About Earnings Report cards for public companies are due and a flood of them are set to come pouring in next week. The first week of earnings season typically features banks, and we'll hear from several of them—including JPMorgan, Goldman Sachs, Bank of America and Wells Fargo. Banks set the tone for the season and we'll be tuning our ears to hear what they have to say about the following:
Apart from the financial sector, we want to pay attention to what companies are doing with their money. The Federal Reserve is concerned about a slowdown in business spending, which is one of the key reasons it is considering lowering interest rates. Lower rates make it cheaper for companies to borrow, which should translate into more spending. The Fed has good reason to be concerned given the falloff in CapEx spending in the first quarter.
 Instead, companies have been putting their extra cash into share buybacks and dividends for their shareholders. This rewards existing shareholders and is a perfectly legitimate use of capital, but it is not what we like to call "organic growth." Their businesses aren't expanding, even though their bottom lines are.  The Economic Front Next week in the U.S., we will get readings on retail sales, business inventories, import prices, and housing starts for June. We'll also get a preliminary reading on consumer sentiment for July. We saw this week that consumer prices in June had their biggest jump in a year and a half. So far the consumer has held up well in 2019. Will that confidence continue? These are all among the economic indicators that the Fed will be considering leading up to its July 31st meeting.
Global Markets Amazing First Half Speaking of things global, the first half of the year has been stupendous for stock markets around the world. Yes, the U.S. continues to break new records, but the first half gains for companies like Argentina, Italy, Greece, and other countries facing challenging economic times is worthy of our attention. To be sure, stock markets and economies are not the same, although they typically influence one another. But the disconnect occurring in many of the countries on this list compiled by Bespoke Investment is remarkable. Easy monetary policy deserves a lot of the credit, for sure.
chart courtesy Bespoke Investment Group - data as of July 11, 2019 
chart courtesy www.koyfin.com  J B Hunt Transport's stock rose by almost 6% today. Health insurance company Humana's stock increased by almost 4% after Yahoo Finance published an article saying it was worth investing in, since it continues to beat earnings estimates.  Stocks for Illumina, the genetic analysis systems manufacturer, plummeted by a whopping 16% after the release of their second-quarter revenue forecast, which was $3 million lower than the consensus estimate. The stock for Johnson & Johnson—the multinational medical devices, pharmaceutical, and consumer packaged goods manufacturers—fell over 4% after the launch of a federal investigation determine if the company was knowingly lying about the potential cancer risks of its talcum baby powder.  Word of the Day Earnings EstimateAs the market celebrates the primary indexes reaching new record highs, some companies are receiving further good news with the expectation that they will beat their earnings estimates. Here's a little more context:
 image courtesy Moscow Times, 1998 Today in History July 12, 1998: Russia secures an $11 billion financial aid package from the IMF (International Monetary Fund) in an effort to halt its financial crisis. Inflation is the country is skyrocketing, and capital is rapidly leaving the country.
Here's how authors Abbigail J. Chiodo and Michael T. Owyang described it in a paper for the St. Louis Fed.
"After six years of economic reform in Russia, privatization and macroeconomic stabilization had experienced some limited success. Yet in August
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Friday, July 12, 2019
Skyrocketing
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