All three of the major averages reached record highs this past week, although the Dow shed about a quarter of a percent when all was said and done thanks to declines from Home Depot and banking components Goldman Sachs and JPMorgan Chase. The S&P 500 managed a 0.54% gain for the week and the NASDAQ 1.2%. The transportation average took a bit of a hit, moving lower by almost 3% and has lagged the market this year – not a positive sign. Sector rotation favored utility stocks that moved higher by 2.7% and telecom and healthcare were winners as well. With crude oil futures turning negative, energy stocks took the prize on the negative side of the ledger falling 0.5% for the week.
Continued wrangling in Washington produced headlines, but little else on healthcare reform, deregulation and taxes. On Wednesday, the FOMC ends its two-day meeting and will decide on another interest rate hike, which is unlikely for now. However, the Fed will probably report that it will begin to normalize it balance sheet “relatively soon”. Elsewhere earnings will continue to pour in and we will get to hear from blog choices 3M, Kimberly-Clark, Gilead Sciences, Verizon, Intel, Dow Chemical, Hess and United Parcel Service.
With earnings reports for the second quarter largely exceeding expectations thus far, results are finding its way into the bidding. A solid showing on this front is critical for the stock market, given the extended valuations in place. Wall Street is still on board, however, as recent stock market action favors the bulls, apart from a few bumps along the way.
Here is the answer to last week’s trivia question: California’s Knotts Berry Farm amusement park destination is owned by? Walt Disney, Six Flags, Cedar Fair Entertainment or Comcast/Universal Parks. Answer: Cedar Fair Entertainment. The Knotts Berry Farm brand of jams and preserves is owned by J.M. Smucker.
Today’s Trivia Question: As of June 30, 2017, which company leads the pack in terms of market capitalization (shares outstanding times price per share)? Apple, Alphabet (Google), Amazon.com or Microsoft.