The stock market continues to demonstrate wide swings, as traders sift through a range of economic news, both here and abroad. The domestic economy is moving along nicely, but the absence of growth in China and other emerging markets will likely spill over to our shores dealing a blow to quarterly earnings for the remaining quarters of the year, especially for the multi-nationals. I expect the back-and-forth trading to persist for a while, given this uncertainty. Furthermore, investors are looking for a clearer message from the Federal Reserve about possible interest rate hikes. On Thursday, the Fed will announce it long-awaited decision on whether or not to raise interest rates. Right now it’s a toss-up, as the central bank seeks to navigate through choppy waters globally and stateside by weighing strong job growth with low inflation. For the holiday-shortened week, the Dow Industrials and the S&P 500 managed a 2% gain, while the NASDAQ moved ahead by 3%. It was nice to the see the transports leading the pack for a change with a gain of 3.3%. After a negative outlook from Goldman Sachs on oil prices, crude retreated $1.42/bbl. taking energy stocks lower by one percent. Goldman trimmed its 2016 West Texas price forecast to $45 a barrel. The global surplus of oil is even bigger than Goldman Sachs thought and that could drive prices as low as $20 a barrel, before it sees a rebound. All other sectors were in the green, however, led by technology and healthcare, up about 3% for the week. Stocks are trying to establish a base from which to rally, following a difficult August and a volatile first week of September. Lower valuations could well be setting the stage for a decent year-end equity market rally. In earnings news, Oracle Corp. will report first quarter fiscal 2016 earnings on Wednesday with a consensus estimate of $0.52 per share vs. $0.62 a year ago, as it struggles with the transformation from a software license provider to cloud computing.
Here is the answer to last week’s trivia question: Verizon Communications is the result of the 2000 merger of Bell Atlantic and GTE, formerly General Telephone and Electronics Corp. The “electronics” component of GTE is attributable to what brand once owned by the company: Sylvania; Zenith; Magnavox; or Philco? Answer: Sylvania. Although Sylvania was once a household name in consumer electronics, lighting and “Blue Dot” flash bulbs, the brand is all but gone. The lighting division, however, was sold to German lighting company Osram in 1993, and operates in the U.S. as Osram Sylvania. For those who thought Philco was the answer, GTE did purchase the Philco name from Ford Motor Co. in the late ‘70’s and incorporated it into the Sylvania division before selling pieces of the electronics businesses to Phillips and White Consolidated Industries (now Electrolux) in 1981.
Today’s Trivia Question: Belgian pilsner beer Stella Artois has been brewed since 1926. The brand is now owned by: Heineken; Anheuser-Busch InBev; Miller-Coors; or Constellation Brands?