Week in Review

Equities were little changed this past week and ended mostly on a mixed note with lower than average volume. The Dow Industrials moved up 81 points or about 0.4%, but the S&P 500 was virtually flat and the NASDAQ retreated 0.33%. Small cap stocks were the clear winners with the Russell 2000 and the S&P SmallCap Indexes higher by 1.3% and 1.6%, respectively. The major market sectors also traded in opposite directions with half gaining ground while the others ended in the red. Telecom stocks were the market leaders this past week with a nearly 4% pop on average followed by energy as crude prices topped $50/bbl. Defensive plays were on the losing side, especially utilities that gave back 2.7%. Transportation stocks, however, gained some ground as airlines slowly recovered from recent weather-related events. 

       On Wednesday, the Federal Reserve kept short-term interest rates alone with the prospect of one more increase by the end of the year. Low inflation and a weakening of GDP forecasts played key roles in the decision. The central bank, however, confirmed its promise to shrink its $4.5 trillion balance sheet by buying back bonds issued during the financial crisis. In Washington, wrangling over healthcare and tax reform remain in the headlines as well as infrastructure spending, but still no resolutions. And North Korea and the White House continued their war of words as more missile strikes appear to be looming. Despite this wild card, market fundamentals remain supportive and additional records could well be set. However, the easy money has been made and the road to higher stock prices may be bumpy as valuations continue to climb. 

       Next up for investors will be third-quarter earnings season, which will kick into gear shortly. Expectations are for modest gains, as the bulls strive to sustain the high earning’s multiples. Recent profit performances have been strong, which has helped extend this historic market run.  On Wednesday, we will get fourth quarter results from aggressive choice Jabil Circuit with analyst estimates of $0.62 per share, well up from last year’s $0.28.

Here is the answer to last week’s trivia question: Weber-Stephen Products, maker of the iconic Weber-brand barbecue grills, is? Owned by BDT Capital Partners; Family Owned; a division of Whirlpool Corp.; Publicly Traded on the NASDAQ under the symbol WEBR. Answer: Founded in 1893 and family owned until 2010, Weber-Stephen is now a part of BDT Capital Partners. 

Today’s Trivia Question: The largest stock exchange in Canada is? Montreal Stock Exchange, NASDAQ Canada, Toronto Stock Exchange or Canadian Securities Exchange.

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