Stocks, once again, moved mostly sideways as the presidential inauguration did little to spur enthusiasm. Traders are still skeptical as to the new administration’s ability to make the changes necessary to provide a catalyst for meaningful growth. The wait-and-see attitude had the major averages lower for the week, with the Dow Industrials and the NASDAQ both shedding 0.3% and the S&P half of that at 0.15%. The small cap Russell 2000, however, took to profit taking with a 1.5% decline. There were about 3 declining stocks on the NYSE for every 2 that gained ground. There was also little change by sector except for consumer staples, which had a nice week with an advance of 1.9%, offset by a 1.6% decline in health care. Gold broke the $1,200 level with a nearly 7% gain over the past thirty days.
Earnings season is well under way, and, in keeping with recent trends, results continue to be fairly good. This should mean an improving bottom-line performance, overall, in 2017, which would be especially helpful with valuations now so rich. Noteworthy companies this week with fourth quarter earnings include Verizon, Johnson & Johnson, Kimberly-Clark, Intel, Dow Chemical and Colgate-Palmolive; most of which will be a few cents within last years’ results. The exception: JNJ is expected to post adjusted earnings of $1.56 vs. fourth quarter 2015’s $1.44 on strong pharmaceutical sales.
The stock market looks a bit fatigued and has been in a consolidation trend over the past few weeks. The bull market can remain in place, but the path to higher prices may be bumpier than in the past, owing to the loftier valuations and political uncertainties.
Here is the answer to last week’s trivia question: Deere & Co. began when blacksmith John Deere opened a small tool shop in Grand Detour, Illinois in? 1829, 1837, 1882 or 1904. Sue from Long Island got it right. The year was 1837.
Today’s Trivia Question: The Borgata Hotel Casino in Atlantic City is owned by? MGM Resorts, Caesars Entertainment, Wynn Resorts or Las Vegas Sands.