Market Perspective for November 10, 2017

The Nasdaq led the week’s index performance with a 0.20-percent decline as the broader market entered a consolidation phase. Broadcom’s (AVGO) $100 billion offer for Qualcomm (QCOM) and a positive report from Nvidia (NVDA) boosted the tech sector. iShares U.S. Semiconductors (SOXX) advanced 0.26 percent. SPDR Consumer Staples (XLP) advanced 2.18 percent.

Futures market speculators raised the odds of a December rate hike to 100 percent following the Fed’s November 2nd meeting and investors fully priced a rate hike into financial stocks. Short-term traders took profits. SPDR Financials (XLF) declined 2.61 percent.

This week was light on economic data. Initial claims for unemployment remain near 44-year lows. The University of Michigan’s Consumer Sentiment survey for early November declined slightly from October’s high.

Crude oil held above $57 this week following political volatility in Saudi Arabia. U.S. oil production hit a new all-time high, but crude finished the week at $56 and change. SPDR Energy (XLE) gained 1.40 percent on the week.

Foreign currencies bounced mid-week versus the U.S. dollar. The 10-year Treasury yield rebounded near 2.4 percent on Friday. Despite the weaker dollar, the S&P 500 Index extended its lead on the MSCI EAFE Index. Over the past two months, the S&P 500 has climbed 5 percent versus a 2.5 percent gain in the MSCI EAFE.

Nvidia (NVDA) earned $1.33 versus estimates of $0.95. CVS Health (CVS) earned $1.50, 2 cents better than forecasts. Twenty-First Century Fox (FOX) met expectations, but shares rallied on rumors it may sell most of its assets to Disney (DIS). Shares of Disney also climbed on the week. SPDR Consumer Discretionary (XLY) benefited from strength in media shares and rose 0.72 percent.


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