Before we talk about the stodgy ole stock market, anyone see that Bitcoin? $11K last week – $16K this week…. and as I write this bitcoin futures are up over $18K. Just another week in the life…. (here is what you need to know about bitcoin futures)
Back to your regularly scheduled program… the S&P 500 rested a bit while a small correction rolled through the massive winners of 2017 in mega cap tech land, but in the end all was well again by Friday.
“The Nasdaq Composite Index was getting a little frothy, so it’s not surprising to see that some details in the proposed tax bill that would impact tech companies turned out to be a catalyst for a selloff in these stocks over the past few sessions,” said Quincy Krosby, chief market strategist at Prudential Financial.
The retention of the corporate alternative minimum tax in the Senate version of the Republicans’ tax bill has been seen as a factor in tech-stock selling. The House’s bill repealed the corporate AMT, but in a last-minute switch before passing its bill early Saturday morning, the Senate decided to keep the provision.
Still good sailing otherwise… for the week the S&P 500 gained 0.35% while the NASDAQ fell 0.1%.
“Getting the tax plan done will still be a challenge, but it doesn’t seem as impossible as it once did, and now there’s optimism that it could happen before the end of the year, which means it could be made retroactive and change the liability for companies and individuals for this year as well as next, which would be a positive,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab.
In economic news, ISM Services fell to 57.4 in November from a 12 year high of 60.1 in October. The U.S. created 228,000 jobs in November, surpassing the 200,000 that had been expected, according to the nonfarm payroll report. The unemployment rate held at 4.1% while wages rose 0.2%.
“The report all around is pretty hard to argue with,” said Dan North, chief economist at Euler Hermes North America. “But there is one important thing that’s missing: wage growth.” Construction firms and manufacturers, for instance, both boosted hiring last month after home building and production recovered from storm-related disruptions. Builders added 23,000 new jobs and manufacturers created 31,000 new positions. Professional-related work and health-care jobs also saw strong gains again. Most other industries saw little change.
“The jobs reports highlights the Goldilocks environment: continued growth but no profit pressure of rising labor costs,” said Tina Byles Williams, chief investment officer at FIS Group.