Month: November 2019

Equities enjoyed a holiday rally as economic data showed a strengthening economy. The Nasdaq advanced 1.75 percent, the S&P 500 Index 1.04 percent and the Dow Jones Industrial Average 0.73 percent on the week.

SPDR Technology (XLK) climbed 1.80 percent for the week, SPDR Consumer Discretionary (XLY) 1.76 percent and SPDR Healthcare (XLV) 1.28 percent. Holiday shopping season sparked optimism in the retail sector this week. SPDR S&P Retail (XRT) climbed 2.09 percent. Amazon (AMZN) advanced 3.45 percent. Disney’s rollout of its streaming service, along with its holiday movie lineup, boosted its shares 2.43 percent.

Investors continue to favor high-quality and low volatility shares. Vanguard Dividend Appreciation (VIG) increased 0.93 percent and iShares Edge MSCI Minimum Volatility USA (USMV) 1.00 percent.

Economic data showed the U.S. economy was stronger than initially believed in the third quarter. The Bureau of Economic Analysis increased its third quarter GDP growth estimate from 1.9 percent to 2.1 percent.

New homes sales were stronger than expected. October sales hit an annualized pace of 733,000, higher than the forecast. September sales were revised higher to 738,000. iShares U.S. Home Construction (ITB) gained 1.79 percent on the week.

Consumer confidence declined slightly in November, according to the Conference Board’s survey. Still, confidence remains near multi-year highs. Weekly initial claims for unemployment were 213,000, still near four-decade lows. Durable goods orders increased 0.6 percent in October, far ahead of a forecast decline of 1.2 percent. Consumer spending rose 0.3 percent in October, faster than expected.

Bonds rallied across the board this week as interest rates came down. The 10-year Treasury finished the week at 1.78 percent. iShares iBoxx High Yield Corporate Bond (HYG) gained 0.30 percent for the week. Fidelity Corporate Bond (FCOR) climbed 0.39 percent.

The U.S. Dollar Index held steady this week. iShares Latin America 40 (ILF) fell 2.72 percent, while iShares MSCI Emerging Markets (EEM) down 0.76 percent. iShares China Large-Cap (FXI) slid 0.94 percent after the U.S. Congress passed and President Trump signed a bill supporting Hong Kong protests.

Equities rallied to new all-time highs on merger news. Schwab (SCHW) formally announced its offer for TD Ameritrade (AMTD) and LMVH Moet Hennessy Louis Vuitton (LMVUY) made an offer for Tiffany’s (TIF). Shares of Ameritrade and Tiffany’s climbed 7.65 percent and 6.20 percent respectively. Normally the stock of acquiring companies drops, but investors like both moves. Shares of Schwab and LMVH gained 2.30 percent and 2.27 percent.

Buyout news continued after the bell when Palo Alto Networks (PANW) announced it would buy privately held Aporeto for $150 million.

The Nasdaq rallied 1.32 percent. Technology and healthcare were the best performing sectors. SPDR Technology (XLK) advanced 1.43 percent, while SPDR Healthcare (XLV) climbed 1.15 percent. Financials also performed well to start the week. SPDR S&P Regional Banking (KRE) returned 1.00 percent.

This will be a light week for economic data. October new home sales will be announced Tuesday. Wednesday brings the second estimate of third quarter GDP. Economists expect it will match the initial estimate of 1.9 percent growth.

Earnings reporting will be light over the coming days. Among the firms delivering results are VMware (VMW), Dollar Tree (DLTR), Analog Devices (ADI), Keysight Technologies (KEYS), Dick’s Sporting Goods (DKS), Chicos FAS (CHS), Guess (GES), Abercrombie & Fitch (ANF), Hormel Foods (HML), Autodesk (ADSK), Deere (DE) and Frontline (FRO).

Note: The stock market will be open a full day on Wednesday. It will close for the Thanksgiving Day holiday and at 1 PM on Friday.