The holiday “RallyPause” ended, as the market advanced all 4 trading days of the new year, with the S&P 500 gaining 2.6% to another new record high. The Dow Jones Industrial Average jumped 2.3% to close over 25,000. That venerable index was around 22,000 back in September when Warren Buffet made his prediction of DJIA 1 million in 100 years. It had recently crossed over 1000 when I first got in the business in 1983, having taken a century to get to that level. In other words, the DJIA has created three times more wealth in the last 4 months as it did in its first 100 years! The December employment report showed 148,000 new jobs, below the consensus estimate of 190,000, but in a “glass is half-filled” world, that’s good news, because it still shows growth while perhaps reducing the pressure on the Federal Reserve to quicken the pace of rate hikes. The yield on the Ten-Year Treasury rose 7 basis points to 2.48%. Cannabis stocks got smoked (pun intended), after Attorney General Jeff Sessions rescinded the Obama administration policy of non-interference with marijuana-friendly state laws.
Fourth quarter earnings season will kick off, with 7 S&P 500 companies scheduled to report. The glass should be comfortably more than half-filled, with consensus estimates of 10.5% earnings growth on 6.7% revenue growth. All 11 sectors are expected to report growth for the quarter, led by the Energy sector. Additionally, guidance for 2018 should be broadly increased as a result of the lower corporate tax rate. The economic calendar is light, with the retail sales and CPI releases on Friday as possible highlights.
Stocks in the News:
Landec Corporation (LNDC): Revenues were essentially flat at $136.5 million, while net income decreased 63% to $487,000 for their fiscal second quarter. Gross profit was negatively impacted by the aftermath of the hurricanes and tropical storms which resulted in higher produce sourcing costs. “The performance of our growth businesses-Eat Smart Salads, O Olive and Lifecore- remain strong and each is expected to meet or exceed its growth goals for fiscal 2018, driving increased profitability and partially offsetting the produce sourcing cost increases that impacted the first six months of fiscal 2018,” stated Greg Skinner, Landec’s CFO.
WisdomTree Investments, Inc. (WETF): Announced that it has committed to provide up to $30 million in additional working capital to AdvisorEngine Inc., an innovative financial technology company which WisdomTree originally invested in November 2016. The majority of the funds are being used by AdvisorEngine to acquire CRM Software, Inc., known as Junxure, an industry-leading Client Relationship Management software and technology provider for financial advisors.Tagged: Chicago, Chicago Investment Management, Eric Kuby, finance, financial commentary, Fund Fact, Gold, Kuby's Commentary, LNDC, Market Commentary, North Star, North Star Financial Services, North Star Investment Management, NSIMC, Oil, Russell 2000, S&P 500, Stocks In the News, VIX, Wealth Management, WETF.
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