Weekly Performance
Dow -0.27% S&P -0.13% Nasdaq +0.47% Russell +1.19% EuroStoxx -1.29% FTSE -0.70% CAC -1.14% Dax -1.02% Ibex -0.82% MIB -2.07% SMI +0.54% Nikkei -1.25% Hang Seng +0.27% CSI +0.22% Shanghai -1.45% Shenzen -4.16%
Investors continued to keep an eye on Capitol Hill, where Republican lawmakers are trying to implement the biggest tax overhaul in more than 30 years. The House passed its version of a tax reform bill on Thursday, while the Senate continued to make changes to its version, which will now includes a provision to repeal the Affordable Care Act's individual mandate. Retailers dominated this week's batch of earnings--one of the final batches of the third quarter earnings season. Shares of Wal-Mart (WMT) jumped 10.9% to a new all-time high on Thursday after the world's largest retailer reported better-than-expected earnings and revenues for the third quarter and issued upbeat profit guidance for fiscal year 2018. Conversely, shares of Target (TGT) tumbled 9.9% on Wednesday after the company issued a disappointing earnings forecast for the holiday season. Ross Stores (ROST), Gap (GPS), Advance Auto (AAP), Foot Locker (FL), Abercrombie & Fitch(ANF), Buckle (BKE), Shoe Carnival (SCVL), and Hibbett Sports (HIBB) all soared after beating quarterly profit estimates. Most also beat sales estimates, and many provided upbeat guidance. Unsurprisingly, the S&P 500's consumer discretionary (+1.3%) and consumer staples (+1.0%) sectors, which house retailers, finished near the top of the week's sector standings. The telecom services (+0.8%) group also outperformed, trimming its November loss to 2.1%. On the flip side, the energy sector (-3.4%) struggled, giving back the prior week's advance and then some. The price of crude oil decreased at the beginning of the week--which didn't bode well for the energy group--but the commodity bounced back on Friday to end the week little changed; West Texas Intermediate crude futures slipped 0.1% to $56.71 per barrel.Industrial shares also underperformed after General Electric (GE) cut its dividend by half and dialed back its profit forecast for 2018. GE shares ended the week lower by 11.1%, extending their year-to-date decline to 42.4%. The S&P 500's industrial sector lost 1.1% for the week.
In the bond market, U.S. Treasuries moved in a curve-flattening trade, sending the 2yr-10yr spread to its lowest level since 2007. The yield on the benchmark 10-yr Treasury note dropped five basis points to 2.35%, while the 2-yr yield climbed six basis points to 1.72%.
Following this week's events, investors still strongly believe that the Fed will raise rates next month, with the CME FedWatch Tool placing the chances of a December rate hike at 100.0%.
Macro :
- Mugabe Said to Agree to Stand Down as Zimbabwean President
- Merkel Bid for New Coalition Hangs by Thread in Party Talks
Keep an eye on :
- ADS GY : Adidas Is Said to Plan Moving IT Dept. From HK to Shanghai: SCMP
- ALV GY : Allianz ‘Well Protected’ Against Takeovers: CFO Wemmer to BZ
- ALO FP : GE Must Keep Commitments on Alstom, France’s Le Maire Says
- ALT NA : Le Maire Says He’s Watching Altice Situation Carefully
- BAYN GY : Monsanto Hearings on Whether Roundup Causes Cancer Delayed
- CRG IM : Carige Capital Increase to Go Ahead as Investors Pledge Support
- COFIB BB : Cofinimmo Contemplates Divesting Egmont I, Egmont II Offices
- CVAL IM : Creval CEO Says Subordinated Bond Conversion Not on Table: Sole
- IGY GY : RWE Is Said to Have Held Talks With Enel on Innogy: Reuters
- DEC FP : APN Outdoor takeover speculation stoked by JCDecaux chair visiting Australia - report
- OR FP : L’Oreal CEO Agon Sees ‘Record’ 18% FY Operating Margin: Investir
- LSE LN : LSE Board Is Said to Weigh Publishing Dossier on Rolet: FT
- MAP SM : Mapfre to Make Every Effort to Maintain Dividend: El Economista
- PSM GY : PROSIEBENSAT.1 Says Thomas Ebeling to Leave Co. by End Feb. ’18
- RR/ LN : Rolls-Royce Seeks to Sell Diesel Parts Maker: Sunday Times
- RWE GY : RWE Is Said to Have Held Talks With Enel on Innogy: Reuters
- TSLA US : Tesla’s Electric Truck Reveal Weighs on Peers: Industrials Wrap
- 6502 JP : Toshiba Seeks $5.4 Billion Cash Injection to Avoid Delisting (1)
- TLW LN : Tullow’s Jubilee Field Off Ghana to Halt Twice in 2018: Citi FM
- YAR NO : Yara to Buy Vale Cubatão Fertilizantes Complex in Brazil
- DG FP : French Highway Cos. to Increase Tolls by 1.03-2.04% in Feb: JDD
- WG/ LN : Wood Group Top 10 Shareholder to Reject CEO’s Pay: Sunday Times