The Dow Jones and S&P 500 climbed to record highs last week as investors abandoned concerns about the fallout of the U.K.’s Brexit vote from the EU and instead focused on 2nd quarter earnings results alongside rising expectations of more monetary stimulus from central banks in England and Japan combined with waning expectations of an approaching rate hike in the U.S.
More 2nd quarter corporate earnings results will be reported this week including IBM on Monday, Microsoft on Tuesday, and AT&T and General Motors on Thursday.
Late last Thursday July 14th Nice, France faced a truck terrorist who went on a driving rampage, killing at least 84 and injuring scores more on Bastille Day when France celebrates unity and freedom.
Political Instability In Turkey
Turkey arrested 6,000 citizens over the week-end following a failed coup that began on Friday and resulted in 290 deaths and more than 1400 wounded, according to Turkey’s foreign ministry which described the event as a “terrorist campaign.”
Turkey’s foreign ministry has placed the blame for the unsuccessful military coup squarely with Muhammed Fethullah Gulen, a Turkish preacher, former imam, and political figure who lives in exile in the U.S. and has promoted a tolerant version of Islam that emphasizes altruism, hard work, and education at a time when Turkey’s President Recep Tayyip Erdogan has taken steps towards the Islamization of Turkey and rejected attempts to call Turkey the representative of moderate Islam.
President Erdogan, a devout Muslim, is trying to change Turkey’s form of government from the current parliamentary form to a U.S. style presidential one with more presidential powers, and has accused Gulen of supporting the week-end coup, a claim that Gulen vehemently denies.
President Erdogan has asked the U.S. government for Gulen to be extradited to Turkey.
“This coup attempt was staged in no uncertain terms by the Fetullah Gulen Terrorist Organization (FETO). Our Government has been constantly exposing the real motives of this terrorist group and its leader, Fetullah Gulen, to all allies and partners. This foiled coup is the latest criminal act revealing the danger posed by FETO” according to a recent statement by Turkey’s foreign ministry.
The week ahead in the U.S. economy
The week ahead has light economic data released and will have a focus on 2nd quarter corporate earnings.
Monday- NAHB Housing Index (July), Net Long Term Tic Flows
Tuesday- Building Permits and Housing Starts (June)
Wednesday- MBA Mortgage Index, Crude Inventories
Thursday- Initial and Continuing Jobless Claims, Existing Home Sales (June), Leading Indicators (June), Philadelphia Fed (July), FHFA Housing Price Index (May), Natural Gas Inventories.