The economic calendar is normal, with a holiday-shortened week and some ongoing political worries. Competing with the Washington Circus will be Q417 corporate earnings reports. The former topics will have greater news interest, but investors should be digging into the earnings reports. The earnings story is always a tasty stew – expectations, results, differing measures, revenues, and future expectations. The tasters are free to report their impressions. Sound benchmarks are elusive. This season has an extra ingredient – the tax cut effects. I expect the punditry to be looking ahead, and asking:

How should investors interpret Q4 earnings updates?

Last Week Recap

In the last edition of WTWA I expected a focus on inflation effects. While that generated some attention and headlines, the modest PPI and CPI reports stilled any imminent worries. Many sell-side firms and columnists continued to describe their worries for 2018, our theme of the last two weeks.

The Story in One Chart

I always start my personal review of the week by looking at a great chart. I especially like the Doug Short design with Jill Mislinskiupdates and commentary. You can see many important features in a single look. She notes the new records along with other indicators. The entire post is well worth reading for the collection of charts and analytical observations.

The trading range for the week was about 2%, below last week’s 2.6%, but higher than in recent months.

The News

Each week I break down events into good and bad. For our purposes, “good” has two components. The news must be market friendly and better than expectations. I avoid using my personal preferences in evaluating news – and you should, too!

The economic news was good. Before the inflation numbers I published a guide to assist interpretation. Many seemed to find it useful, and one of my plans for the new year is to more analysis of economic indicators.