Another week in the books and another record high for the major averages, culminating on Friday with a 224-point gain in the Dow, thanks in part from strong results from Intel , 3M and Caterpillar this week. In all, equities climbed about 2.3%, as all market sectors were in the green. Healthcare led the charge with a 3.8% gain followed by telecom stocks at 3.4%. Consumer staples were the laggards, but they also managed to stay barely positive. Crude oil, once again, moved higher and this past week rose $2.77/bbl. to settle at $66.14. International Brent crude topped $70/bbl. Smaller-cap stocks, however, took a bit of a breather with the Russell 2000 gaining only 0.65%. And the transports were hard hit with a 1.6% drop, as airline stocks tumbled on news of increased capacity and possible price wars ahead.
U.S. economic growth slowed to 2.6%, but Treasury Secretary Steven Mnuchin believes that the reading was a temporary blip in an otherwise 3% GDP growth story. Overall, the economy’s strength is still broad-based, with industrial activity gaining as the year turned, and with business confidence continuing to climb. President Trump’s remarks on Friday at the World Economic Forum in Davos, Switzerland were positive and centered on his theme “America is Open for Business”. Also helping equities was the temporary resolution of a government shutdown through February 8, with immigration on the table as a stumbling block for a long-term funding passage.
Not surprisingly, the bulls are still in charge, with the stock market continuing to score new highs almost on a daily basis. It seems that optimism about the economy and earnings continues to keep the bears at bay, even as concerns about possible future government shutdowns, worsening trade relations and high valuations continue to linger. Earnings, which have been mostly positive so far, will continue this week as we hear from buttonwoodproject conservative candidates Danaher – estimated to have earned $1.16 in the final quarter vs. $1.05 in the prior year and United Parcel Service ($1.66. vs. $1.63) as well as income choice LyondellBasell with a forecast of $2.55 vs. $2.16.
Here is the answer to last week’s trivia question: The largest privately held company in the U.S. is? Koch Industries, Mars, Inc., Toys ”R” Us, Inc., or Cargill, Inc. Answer: Agriculture and commodities conglomerate Cargill, Inc. If it were a public company, it would rank around No. 15 on the Fortune 500 behind McKesson Corp. and ahead of AT&T, with revenue of about $110 billion.
Today’s Trivia Question: Multi-national financial services company The Goldman Sachs Group, Inc. was founded in what year? 1869, 1902, 1932 or 1958.