Even ongoing turmoil in and around the White House could not deter Wall Street from moving into new record territory. Closing again on Friday at all-time-highs, the three major indexes gained about 1.7% for the week. Despite a three-day weekend ahead, traders did not take money off the table, which has been the norm in past years. With a potential fear of an unforeseen event shaking markets, money managers like to play it safe on such occasions. Instead, equities continue to be propelled by decent earnings for the fourth quarter; positive guidance for the remainder of the year; improving economic data and President Trump’s proposals for less regulation and tax reform.
Gold, oil and the U.S. dollar treaded water this past week despite Federal Reserve Chair Janet Yellen’s signal that the next rate hike may take place a soon as next month. And, if the economy continues to improve and inflation indicators move higher, “Waiting too long to remove accommodation would be unwise”. With the warning in place, bulls continued to see the glass as half full and sent health care and financial stocks higher by 2.4% and 2.2%, respectively. Technology also had a good week, and except for energy (negative by 2%), all sectors were in the green.
With the prospect of moderating regulation and tax cuts, merger and acquisition announcements were again on the table with Kraft Heinz making a $143 billion bid for British/Dutch giant Unilever. That sent shares of other consumer staples soaring to include Colgate-Palmolive and Kimberly-Clark, which are also viewed as likely takeover targets. In earnings news, gold and copper producer Newmont Mining will report on Tuesday with an estimate of $0.33 for the fourth quarter vs. $0.04 a year ago, and apparel and footwear retailer Foot Locker on Friday ($1.32 vs. $1.16).
Markets will be closed on Monday for Presidents Day. Enjoy the rest of the holiday weekend.
Here is the answer to last week’s trivia question: 2014 marked the record high for initial public offerings (IPOs) for a total of 383. How many IPOs came to market in 2016? 128, 187, 209 or 266. Answer: 128, a decline of about 65%.
Today’s Trivia Question: DineEquity (NASDAQ: DIN) operates the Applebee’s Neighborhood Grill franchise and what other restaurant concept? Chili’s, Outback Steakhouse, IHOP or Ruby Tuesday.