Weekly Update

Week in Review

Stocks prices continue to roll. On top of last year’s average 22% advance, all the major indexes scored new highs this past week. The Dow Industrials climbed an impressive 507 points or 2% to 25,803. The S&P 500 and the NASDAQ added about 1.6%. The Dow Transportation Average was the star performer with a gain of over 4%, thanks to a strong airline group. Consumer discretionary stocks were also clear winners as the new tax reform law will be putting more money in shopper’s pockets. And energy stocks moved ahead sharply as crude oil continues to make new 52-week records closing in on $64.50/bbl. Gold also shined with a $13/oz. gain to settle the week at $1,333.40. Once again utilities and telecoms were in negative territory by over 2%, as traders rotate out of safe-haven, interest sensitive plays into stocks that will benefit from world-wide economic growth.

       Along with strong consumer confidence, which hit a 17-year high according to the Conference Board, credit card debt rose nearly 9% in November. JPMorgan Chase, which reported solid earnings on Friday, was forced to raise its provision for consumer credit defaults. Employment growth slowed as we finished 2017, with employers creating just 148,000 jobs in December. That was below both consensus and the 252,000 jobs added in November. Still, there were pockets of strength, as growth was strong in health care, construction and manufacturing. The jobless rate stayed at 4.1% and average hourly earnings were up a reassuring 2.5% for the trailing 12 months of 2017. With both wages and gasoline prices on the upswing, however, inflation worries continue to grow.

       The beginning or the fourth quarter earning’s season got off to a good start and this week’s holiday-shortened trading week will continue to heat up with more corporate results. For monitored positions, we will hear from intermodal and rail giant CSX Corp. with estimates of $0.56 per shares compared to last year’s $.49 and oil-service provider Schlumberger should continue to turn the corner with a final period $0.45 per share tally vs. $0.27 in 2016. The stock market is clearly pricey. But markets can remain extended over long stretches short of sharp rises in interest rates and widespread inflation. 

Here is the answer to last week’s trivia question: Radio Corporation of America, founded in 1919, and its iconic RCA brand of electronics and appliances is owned by which company? General Electric, Cerberus Capital Management, Whirlpool Corp. or Technicolor SA. Answer: France-based Technicolor SA. 

Today’s Trivia Question: This week film and camera pioneer Eastman Kodak Co. was up 192%. The speculation is that Kodak announced it will? Be purchased by Japan’s Fuji Film; Introduce a new line of low-cost digital cameras; Use blockchain/digital ledger technology for licensing by photographers; or report sharply higher sales and earnings for the fourth quarter.

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