After a two-week losing streak, U.S. indexes ended in positive territory across the board. The S&P 500 increased by 0.38%, the Dow was up 0.04%, and the NASDAQ gained 0.83%. The MSCI EAFE, a measure of international developed nations' performance, increased 0.93%.[1]
Of course, seeing positive weekly results is always good, but right now, the general market sentiment seems unsure about where it stands and where to go from here.[2]

Why did the markets have a sluggish week?

Experts last week described the markets as lazy[3] and docile[4], and we have to agree. If these five days of trading were made into a movie, it would probably put a lot of people to sleep.

On paper, last week seemed to provide plenty of opportunities for market excitement -- from major companies' earnings releases to the European Central Bank's latest policy announcement. In reality, however, much of what we saw and heard led to little change and few strong reactions.

But why?

We'd point to a few key occurrences:

1. Earnings reports were mostly good, but few were outstanding.[5]
2. The European Central Bank held interest rates where they are.[6]
3. The presidential election continues to hold the markets in limbo.[7]

While last week's markets seemed more sluggish than normal, a little break from the excitement can be nice sometimes, especially when coupled with increases across all major U.S. indexes.

Looking Ahead

This week not only moves us ever closer to Election Day, but it also brings more earnings reports and ends with a key update on Friday: Gross Domestic Product. GDP gives us insight into how the economy is performing and where we stand with inflation.[8]

ECONOMIC CALENDAR:

  • Tuesday: Consumer Confidence, State Street investor Confidence Index
  • Wednesday: New Home Sales
  • Thursday: U.S. Durable Goods Orders
  • Friday: GDP, Consumer Sentiment

HEADLINES:

U.S. Dollar Surges: The U.S Dollar hit a seven-month high, rising 0.37% compared to a group of currencies. Right now, the exchange between the Dollar and Euro is at $1.088.[9]

Microsoft Reaches All-Time High: After releasing an expectations-beating earnings report, Microsoft's stock prices grew, and on Friday they closed higher than their previous record, set in 1999.[10]

Volatility Lowers: The CBOE Volatility Index (VIX), which measures fear and volatility in the markets, fell to 13.4.[11] 

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The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
 
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
 
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
 
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
 
The S&P U.S. Investment Grade Corporate Bond Index contains U.S.- and foreign-issued investment-grade corporate bonds denominated in U.S. dollars.

The SPUSCIG launched on April 09, 2013. All information for an index prior to its Launch Date is back-tested, based on the methodology that was in effect on the Launch Date. Back-tested performance, which is hypothetical and not actual performance, is subject to inherent limitations because it reflects application of an Index methodology and selection of index constituents in hindsight. No theoretical approach can take into account all of the factors in the markets in general and the impact of decisions that might have been made during the actual operation of an index. Actual returns may differ from, and be lower than, back-tested returns.
 
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
 
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Gross Domestic Product (GDP) is a measure of output from U.S. factories and related consumption in the U.S.  It does not include products made by U.S. companies in foreign markets.

European Central Bank (ECB) was established on June 1, 1998, in Frankfurt as the body at the center of the European System of Central Banks (ESCB) and the Eurosystem. Together with the national central banks of the European Union (EU) Member States whose currency is the euro, the ECB defines and implements the monetary policy for the euro area.

The VIX Index is an up-to-the-minute market estimate of implied (expected) volatility that is calculated using the midpoint of real-time S&P 500 Index (SPX) option bid/ask quotes.  More specifically, the VIX Index is intended to provide an instantaneous measure of how much the market thinks the S&P 500 Index will fluctuate in the 30 days from the time of each tick of the VIX Index.
 
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Consult your financial professional before making any investment decision.
 
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[1]  http://www.marketwatch.com/investing/index/spx

 http://news.morningstar.com/index/indexReturn.html

[2] http://www.marketwatch.com/story/us-stocks-set-for-down-day-with-ge-mcdonalds-earnings-ahead-2016-10-21

[3] http://finance.yahoo.com/news/stock-market-briefing-com-120433017.html

[4] http://www.marketwatch.com/story/the-stock-market-is-caught-deep-in-no-mans-land-2016-10-20

[5]http://www.marketwatch.com/story/us-stocks-set-for-down-day-with-ge-mcdonalds-earnings-ahead-2016-10-21

[6] http://finance.yahoo.com/news/stock-market-briefing-com-120433017.html

[7] http://www.marketwatch.com/story/the-stock-market-is-caught-deep-in-no-mans-land-2016-10-20

[8] http://mam.econoday.com/byshoweventfull.asp?fid=472144&cust=mam

[9] http://www.cnbc.com/2016/10/21/us-markets.html

[10] http://www.wsj.com/articles/microsoft-shares-hit-all-time-high-1477057103

[11] http://data.cnbc.com/quotes/.VIX