Year: 2018

Financials, consumer discretionary and materials steered equities higher this week. The Russell 2000 Index and Dow Transports led with gains of 4.32 and 4.02 percent, respectively. SPDR Financial (XLF), Consumer Discretionary (XLY) and Materials (XLB) rallied 4.47, 4.43 and 6.06 percent. SPDR Industrial (XLI) advanced 2.66 percent and SPDR Healthcare (XLV) 2.14 percent. Apple’s post-earnings dip weighed on SPDR Technology (XLK), holding it to an increase of only 0.95 percent for the week. Utilities was the only S&P 500 sector that lost ground.

Many beaten down indexes rebounded strongly. iShares PHLX Semiconductor (SOXX) advanced 7.57 percent, SPDR S&P Biotech (XBI) 4.45 percent, and SPDR S&P Regional Bank (KRE) 5.34 percent.

Strong economic data boosted stocks this week. Consumer confidence hit a new 18-year high. Weekly jobless claims held low at 214,000. PMIs continued to reflect expansion in the manufacturing sector. Motor vehicle sales climbed to an annualized pace of 17.6 million, beating both expectations and September’s pace.

The November employment report smashed expectations with 250,000 new jobs. The analyst consensus was 208,000. Hourly earnings rose 0.2 percent in October, double expectations. Wages have increased 3.1 percent in the past 12 months.

Strong employment numbers and rising wages, along with the rally in stocks, boosted the 10-year treasury yield to 3.20 percent on Friday. Rising yields weighed on utilities and real estate. Utilities also slipped as traders who bought amid the correction rotated into oversold sectors such as semiconductors.

The U.S. Dollar Index was flat on the week, while the greenback lost some ground versus emerging- market currencies. iShares MSCI Emerging Markets (EEM) rallied 5.57 percent as the oversold asset class recovered. iShares China Large Cap (FXI) climbed 5.31 percent. iShares MSCI EAFE (EFA) advanced 3.13 percent. SPDR S&P 500 (SPY) rebounded 2.44 percent.

Crude oil fell five consecutive days this week, closing at $63.14. It was the lowest close since April. Natural gas gained on the week to close at $3.28 per mmBTU.

General Electric (GE) slipped 17.70 percent this week after it cut its dividend to 1 cent from 12 cents. The move will conserve $3.9 billion in cash as the company restructures its business.

Earnings season has been very strong thus far and this week was no exception. However, while the S&P 500’s blended earnings growth rate rose to 24.9 percent, it was another high-profile shift in guidance that caught investors’ attention. Apple (AAPL) delivered $2.91 per share in earnings, well ahead of the $2.78 consensus estimates. Apple’s revenue guidance for the current quarter estimates $91 billion, below the estimated $92.9 billion. Shares slipped 6.63 percent on Friday following the release. That slide was responsible for about two-thirds of the decline in SPDR Technology (XLK) on Friday.

Equities opened the week lower on Monday as technology shares slid. The British government announced a new 2-percent tax on Internet companies with more than 500 million pounds in revenue starting in 2020. While it is not a large sum, it could pave the way for similar taxes on giants such as Google (GOOGL) and Facebook (FB) in other nations.

Weakness in technology pulled the Nasdaq lower by 1.63 percent. The Russell 2000 Index fell only 0.45 percent. SPDR Financials (XLF) gained 0.91 percent and SPDR Healthcare (XLV) rose 0.24 percent, limiting the Dow Jones Industrial Average’s decline to 0.99 percent.

SPDR Utilities (XLU) rose 1.41 percent and SPDR Consumer Staples (XLP) 1.15 percent. Utilities continue to look vulnerable, however, with interest rates holding up well despite market weakness.

iShares MSCI Emerging Markets (EEM) fell 1.73 percent on Monday.  MSCI Brazil (EWZ) fell 3.52 percent following Sunday’s election and lost more than 5 percent from its early morning high. SPDR S&P 500 (SPY) and iShares MSCI EAFE (EFA) declined 0.55 and 0.28 percent, respectively.

Consumer spending increased 0.4 percent in September, meeting expectations. The Bureau of Economic Analysis also reported core inflation was higher by 0.2 percent last month, 0.1 percentage points higher than expected. Manufacturing PMIs and motor vehicle sales will be out later in the week. Friday will bring the October employment report. Economists expect 202,000 new jobs were added and unemployment held steady at 3.7 percent.

Apple (AAPL) will deliver earnings after the bell on Thursday. It has outperformed as Amazon (AMZN), Netflix (NFLX) and Google (GOOGL) have weighed on the Nasdaq 100. Apple is more than 20 percent of SPDR Technology (XLK) and 13 percent of Invesco QQQ (QQQ). Analysts expect $2.78 in earnings, up from $2.07 percent a year ago. Guidance will be important as tech stocks such as Amazon have beaten earnings handily but have sold off on weaker guidance.

Facebook (FB), eBay (EBAY), Amgen (AMGN), Aetna (AET), Allergan (AGN), Cummins (CMI), Anadarko (APC),  Express Scripts (ESRX), Anthem (ANTM), American International Group (AIG), Cigna (CI), ABIOMED (ABMD), Arista Networks (ANET), CBS Corp (CBS), Ball Corp (BLL), Baidu (BIDU), Alibaba (BABA), Exxon Mobil (XOM), Chevron (CVX), AbbVie (ABBV), Duke Energy (DUK) and Seagate Technology (STX) will also report this week.