Year: 2018

Both the S&P 500 and Dow Jones Industrial Average decreased today.  The S&P 500 lost 0.13 percent, while the Dow declined 0.62 percent. The technology sector hit a new all-time high as takeover talk heated up.  The Nasdaq gained 0.36 percent. On Friday, The Wall Street Journal reported that lntel (INTC) has interest in acquiring Broadcom (AVGO). Broadcom is currently pursuing a bid for Qualcomm (QCOM), while the latter is also waiting to close on a buyout of NXP Semiconductor (NXPI). Shares of Qualcomm, Intel and NXP Semiconductor underperformed on Monday, while Broadcom climbed more than 3 percent.

The latest National Federation of Independent Business (NFIB) small business confidence index will be out on Tuesday. The prior reading was one of the highest in the 32-year old index’s history. February consumer price inflation will also be available on Tuesday.  Economists forecast 0.2 percent inflation across the board.  Last month headline prices jumped 0.5 percent and core inflation 0.3 percent. Producer prices are also forecast to rise 0.2 percent, down from 0.4 percent a month earlier.

February retail sales and sales ex-autos are both expected to have risen 0.4 percent. January retail sales fell 0.3 percent and were flat ex-autos.  The Job Openings and Labor Turnover Survey (JOLTS) for January is expected to reflect 5.89 million openings, up slightly from December.

Several housing data points will be out this week, including the homebuilder confidence index, housing starts and building permits. Analysts see February housing starts slowing to an annualized pace of 1.290 million, down from January’s pace of 1.326 million.

Chinese fixed-asset investment and industrial production for February is due mid-week. European Central Bank President Mario Draghi will speak on Wednesday as taper rumors swirl. Inflation data for the Eurozone is scheduled for Friday.

The 10- and 30-year Treasury yields eased, boosting rate-sensitive sectors such as utilities. The U.S. Dollar Index was flat. Crude oil was off by a dollar to $61 per barrel. The dip in oil followed a report from ING showing U.S. producers gaining market share in Asia. OPEC successfully boosted oil prices with a production cut deal that includes Russia, but Asian buyers have doubled imports from the U.S. in response. The U.S. is producing a record amount of oil, nearly 10 million barrels per day. About 1.5 million of that is exported.

With few S&P 500 companies left to report, investors are turning to first-quarter earnings. Adobe System (ADBE) and Broadcom (AVGO) will headline the week, followed by retailers Dick’s Sporting Goods (DKS), Williams-Sonoma (WSM), Dollar General (DG), Tiffany’s (TIF), Ulta Beauty (ULTA), and Signet Jewelers (SIG).

Equities rallied sharply this week, led by the Russell 2000 Index’s 4.17 gain. The Nasdaq climbed 4.2 percent on the week, the S&P 500 3.5 percent, and the Dow Jones industrial Average gained 3.35 percent. SPDR Industrials (XLI) jumped 4.42 percent, with most gains coming in the wake of President Trump’s announcement of steel and aluminum tariffs. A flat tariff of 25 on steel imports and 10 percent on aluminum imports will begin in two weeks.

SPDR Technology (XLK) rallied 4.18 percent this week. The sector hit a new all-time high on Friday. The semiconductor, Internet, networking and software subsectors also finished the week at a new all-time high.

SPDR Financials (XLF) climbed 4.50 percent after a strong jobs report sent interest rates and rate hike expectations higher. The U.S. economy created 313,000 jobs in February, blowing away expectations of 225,000 and well above 239,000 in January. Construction, retail and manufacturing created the most jobs. After last month’s gains, retail employment is back to a new all-time high despite brick-and-mortar struggles.  Unemployment held steady at 4.1 percent. The only miss in the data was a 0.1 percent increase in hourly earnings. Economists forecast a 0.2 percent increase.

Weekly jobless claims hit 231,000 last week, up from 210,000 a week earlier, but still near four-decade lows. January wholesale inventories climbed 0.8 percent, a positive move for first-quarter GDP. The 10-year Treasury yield ended the week at 2.89 percent.

Canadian and Japanese central banks left policies unchanged this week. The European Central Bank also left policy unchanged but eliminated its easing bias. Rumors of a short taper between September and year-end also emerged, with a rate hike in 2019. Currency traders responded by selling the euro against the U.S. dollar.

SPDR S&P 500 (SPY) beat iShares MSCI EAFE (EFA) and iShares MSCI Emerging Markets (EEM). SPY rose 3.60 percent, EFA 1.96 percent and EEM 3.41 percent. This marks the fifth consecutive week of SPY beating EFA, and the eighth week of the past nine.

Crude oil rose to $62 per barrel this week. Crude has traded between $66 and $58 a barrel since the end of January. Agricultural commodities pulled back after a strong rally this week. PowerShares DB Agriculture (DBA) declined 0.21 percent on the week and 1.4 percent from the Monday high. Higher agricultural prices pushed China’s consumer inflation up 1.2 percent in February, but weaker commodity prices sent producer prices down 0.1 percent for the month.

Shares of Target (TGT) slumped this week after it missed earnings estimates by one penny. The dip in Target dragged on SPDR S&P Retail (XRT). It finished the week with a small gain of 0.35 percent.