Monday, November 27, 17
Stock futures are pointing to a higher open with the S&P 500 on track to open at a fresh record high ahead of a week that will focus on tax reform and economic growth. WTI crude oil prices are sliding from 2-year highs ahead of the OPEC meeting in Vienna later this week. Retailers will remain in focus amid Cyber Monday shopping after strong Black Friday sales. In a holiday-shortened session on Friday, the S&P 500 gained 5.34 points, or 0.2%, to 2,602.42, closing at a record, with technology and materials shares outperforming. The Nasdaq Composite Index advanced 0.3% to 6,889.16, to clinch an all-time high on Friday. The Dow Jones Industrial Average added 0.1% to 23,557.99, less than half a percentage point from its record finish at 23,590.83. All three main indexes posted their first weekly gain in three weeks. The Russell 2000 index also closed at a record, up 0.3% at 1,519.16.
Bitcoin traded above $9,000 for the first time Sunday morning, only to trade up as much as 18% (tops $9,700) from Friday, a strong rally since briefly dropping below $6,000 on Nov. 12. The currency is now up more than 800% so far in 2017. The number of accounts at Coinbase, one of the largest platforms for trading bitcoin and rival Ethereum, has almost tripled to 13 million in the past year, according to Bespoke Investment Group LLC.
In Asian markets, The Nikkei Index fell -54 points to settle at 22,495, the Shanghai Index fell -31 points to settle at 3,322 and the Hang Seng Index dropped -180 points to settle at 29,686. In Europe, the German DAX is up over 40 points above the 13,100 level, while the FTSE 100 is up around 25 points at 7,435. But the key focus remain tax reform in the U.S. as investors will watch for developments in the Republicans’ tax plan, with a Senate vote on proposed tax changes is expected this week.
Market Closing Prices Yesterday
· The S&P 500 Index gained 5.34 points, or 0.21%, to 2,602.42
· The Dow Jones Industrial Average rose 31.81 points, or 0.14%, to 23,557.99
· The Nasdaq Composite jumped 21.80 points, or 0.32%, to 6,889.16
· The Russell 2000 Index advanced 2.40 points, or 0.16% to 1,519.16
Events Calendar for Today
· 10:00 AM EST New Home Sales for Oct…est. (-6.3%) to 625K
· 10:30 AM EST Dallas Fed Manufacturing Activity for Nov…est. 24.0
· 7:00 PM EST Fed’s Dudley speaks on U.S. Economy: 10 years after crisis
· China’s service trade deficit narrowed to $17.8 billion in October, compared with a deficit of $22.2 billion in September, the State Administration of Foreign Exchange said on Monday.
· China also reported $42.3 billion surplus in merchandise goods in October, compared with a $30.2 billion surplus in September, said the regulator.
Sector News Breakdown
· Black Friday online sales reached a record $5.03 billion, according to the latest numbers from Adobe, up 16.9% from last year. Adobe forecasts online holiday sales will be $107.4 billion this year, up 13.8% from last year. The National Retail Federation expects a year-over-year increase in holiday sales of 3.6% to 4% for a total of $678.75 billion to $682.0 billion.
· Mondelez (MDLZ) mentioned positively in Barron’s saying there is reason to hope that growth is returning to Mondelez, with sales perking up in its latest quarter, especially in the developing markets; many analysts think Mondelez’s stock could rise to $50 or more
· Abu Dhabi National Oil Co. may raise as much as $2 billion from an initial public offering of its fuel-retailing unit, according to people with knowledge of the matter – Bloomberg
· Statoil (STO) announced on Monday that it has agreed to buy stakes in two Norwegian oil assets from Total SA. (TOT) for $1.45B
· SolarEdge (SEDG) downgraded to Hold at Deutsche Bank
· Julius Baer announced the unexpected departure of Boris Collardi as chief executive of private banking giant Julius Baer Group AG. Mr. Collardi is leaving Julius Baer immediately, and is being replaced by Bernhard Hodler, who was Julius Baer’s chief risk officer and deputy CEO
· AstraZeneca PLC (AZN) said that it has submitted a supplemental new drug application to Japan’s authorities for the use of its Tagrisso drug on patients with non-small cell lung cancer.
· Align Technology (ALGN) announced that 5M patients have started Invisalign treatment
· Regeneron (REGN) announced that results from two Phase 2 studies that added the angiopoietin2 antibody nesvacumab to EYLEA Injection did not provide sufficient differentiation to warrant Phase 3 development
Industrials & Materials
· Infrastructure stocks including aggregate-maker Vulcan Materials (VMC) could get a boost from an expected announcement by the Trump administration next year of a plan to repair aging roads and bridges according to Barron’s
· Barron’s said a predicted December cold snap could push winter wheat prices up by more than $1 to more than $5 per bushel, which could benefit investors in fertilizer makers including Mosaic (MOS) and Agrium (AGU).
· General Electric (GE) board member James Tisch, who is also the CEO of Loews Corp., disclosed the purchase of 3 million GE shares for nearly $54 million.
· Managers and labor leaders at Germany’s ThyssenKrupp have struck a conciliatory tone as they seek to resolve a dispute over job cuts resulting from a planned merger of its steel operations with those of India’s Tata Steel
· AkzoNobel (AKZOY) has agreed to acquire the business of V.Powdertech Co., the leading Thai manufacturer of powder coatings, supplying a range of products for domestic appliances, furniture and general industrial applications, and currently employing more than 250 employees
Technology, Media & Telecom
· Meredith Corp. (MDP) agreed to acquire Time Inc. (TIME) for $2.8 billion including debt, offering $18.50 per share in all-cash; the billionaire Koch brothers also agreed to support Meredith’s offer with an equity injection of $650 million https://goo.gl/D7MSdj
· Verizon (VZ) mentioned positively in Barron’s saying shares could return 20% over the next year as a long price war in wireless is easing, which has left Verizon’s shares looking cheap
· Tencent Holdings (TCHEY) earnings may grow by more than 50% this year and almost 40% next year, according to Barron’s citing an internet analyst for Morningstar in Hong Kong. That leaves room for shares of the sprawling tech conglomerate to increase as much as 18%.
· Semiconductor and equipment stocks slip overseas after Morgan Stanley downgraded Western Digital (WDC) and Micron (MU) saying a “NAND peak” is nearing
· Shopify (SHOP) announced that its over 500,000 merchants cumulatively experienced their highest Black Friday sales to date. More than $1M in sales went through the platform per minute at the peak, beating last year’s high of $555,716. Mobile continued to grow with 66% of orders being made with a phone or tablet, up from 58% in 2016
Market commentary provided by Hammerstone Markets, a division The Hammerstone Group, a firm separate from and not affiliated with Regal Securities L.P. Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.