Equities got off to a strong start this past week, following the run-off results of the French election and more talk of tax cuts. The Dow moved higher by nearly 450 points the first two trading sessions. Positive earnings from some of the nation’s giants helped stocks along, too. However, the Trump tax agenda lacked details and GDP growth slowed to a disappointing 0.74% in the first quarter, well-below the 2.1% in the final quarter of 2016. And fears of a confrontation with North Korea also had some traders reluctant to place buy orders later in the week.
In all, the NASDAQ hit another record, closing above the 6,000 level for the first time, up 2.3%, thanks to strength in technology stocks. The Dow was higher by nearly 2% and the S&P 500 by 1.5%. Except for telecoms and utilities, all sectors were in the green with tech and health care both higher by about 2.7%. Gains were widespread with the advance decline ratio on the NYSE positive by about 2:1 and 1,127 stocks on the three major exchanges reached new 52-week highs. Crude oil stabilized, but settled once again below $50/bbl. keeping energy shares virtually flat.
More earnings will be reported this week to include Gilead Sciences and CVS Health. On Friday, we will get the non-farm payroll number for April, likely to show a rebound from March’s weak figure. With the economy continuing to edge forward and interest rates low enough to keep competition from bonds at bay, it is hard to see the bull market ending. But with valuations high, stocks will climb at a slower rate and remain vulnerable to unexpected negative events.
Here is the answer to last week’s trivia question: Although trading of financial instruments go back to the 12th century, the oldest stock exchange is considered by most historians to be? The Belgian Bourse, Amsterdam Stock Exchange, Philadelphia Stock Exchange or the Paris Bourse. Answer: Amsterdam Stock Exchange. While origins of “stock” exchanges can be traced back to the exchange in Antwerp (1460) that traded debt instruments, the Amsterdam Stock Exchange, established in 1602, is the oldest in the world. Along with the New York Stock Exchange, it is now part of Euronext.
Today’s Trivia Question: Chase Manhattan Bank (now JPMorgan Chase & Co,) was acquired by what other bank in 1996? Manufacturers Hanover, New York Trust Co., Irving Bank Corp. or Chemical Bank.