Third quarter earnings have been solid so far with more than 70% of the 88 S&P 500 companies that have reported so far beating estimates. Revenues have been even better, with 72% of those companies reporting better-than-expected sales, well above the long-term median of 59%. The results have driven market averages to new highs. The Dow Jones Industrials climbed 456.91 points, or 2%, to 23,328.63 last week, while the S&P 500 index rose 0.9% to 2,575.21 and the NASDAQ Composite advanced 0.4% to 6,629.05. Financial stocks and industrials were clear leaders and technology pitched as well.
In addition to solid earnings and positive guidance, the Senate Republicans agreed to a budget framework that could allow a tax package to pass. That news alone helped the Dow gain 0.7%, on Friday. While far from a sure thing, the Street believes some form of tax reform will pass late this year or next. And retail spending surged 1.6%, overall, last month, even as a trio of hurricanes exacted a deadly toll on many populous communities. In all, this was the best retail showing of the year. Americans flocked to the nation’s car dealers, clothing and accessories stores, furniture outlets, purveyors of food, beverage, and health care products and the Internet.
Looking ahead, earnings will continue to pour in this week including Kimberly-Clark, 3M, International Paper, United Parcel Service, ABB, Colgate-Palmolive, LyondellBasell and Total, SA.
And on a personal note, today marks the beginning of the eighth year of thebuttonwoodproject. I hope you have enjoyed this site over the past seven years as much as I have in writing it.
Here is the answer to last week’s trivia question: Alphabet, Inc. (formerly Google) was originally incorporated in Menlo Park, CA on September 4, 1998. The company went public on August 19 of what year? 1999, 2002, 2004 or 2007. Answer: 2004 at an adjusted price of $42.50 per share. It closed on Friday at $988.20.
Today’s Trivia Question: The most valuable company by market capitalization today is Apple. Fifty years ago, which company made the top of the list? IBM, AT&T, General Motors or General Electric.