Weekly Wrap: Stocks Hit New Highs as Earnings Roll In

Earnings season is well under way, and so far results have been ahead of expectations. According to Factset, 76% of S&P 500 companies that have reported so far have beat consensus estimates. Those earnings, along with progress in Washington on tax reform, pushed stocks to records. The Dow even broke though the 23,000 barrier almost 30 years after the infamous Black Monday crash.

In our view, P&G's top priority remains executing on its strategic agenda. We think much attention over the near term will focus on the top line, where sustainable gains have failed to materialize over the recent past. But we think P&G is rightly focused on extracting costs--the fruits of which aided operating margins to the tune of 190 basis points despite the hit from input cost inflation--reflecting aims to reduce overhead, lower material costs, and increase manufacturing and marketing productivity. We don't think these efforts merely stand to bolster profits, but we think the company will prudently allocate these savings to fuel added brand spending with a bent toward launching value-added new products around the world and marketing this fare to consumers.

Barbara Noverini is cutting her fair value estimate for