Monday, Tuesday, and Friday saw the now usual “no volatility” days – while bears finally saw some action on Wednesday, bulls came right back Thursday with even bigger gains. So while we have been cautious on the market for 3 weeks now all that has meant is consolidation in the market (granted the Russell 2000 has taken some hits). For the week the S&P 500 fell 0.3% while the NASDAQ gained 0.5%. Economic news was light (we cover retail sales below), and earnings are coming to their tail end so we are in a bit of a news vacuum as negotiations about the tax reform bills will take the reigns.
Retail sales slowed in October, rising only 0.2%, after a sharp gain in the prior month.
Sales rose a revised 1.9% in September, up from the prior estimate of a 1.6% gain, boosted by post-hurricane spending. Excluding autos, sales rose 0.1% after a 1.2% gain in September. Economists were expecting a 0.2% gain. Sales excluding autos and gasoline climbed 0.3% after being up 0.6% in the prior month.
The housing sector has been incredibly strong in this leg of the rally.
Here is the 5 day weekly “intraday” chart of the S&P 500 .. via Jill Mislinski.
Thanksgiving is usually a feel good week in the market, as shown by Bespoke.
Since 1945, the S&P 500 has seen an average gain of 0.64% during Thanksgiving week, and in years where the S&P 500 was already up over 10% YTD, Thanksgiving week was even stronger with an average gain of 0.76%. Under both scenarios, the S&P 500 has also been in the black during this period 75% of the time.
The week ahead…
Cluck Cluck! Janet Yellen has a speech Tuesday, and minutes from the prior Federal Reserve meeting will be released Wednesday. Markets will be closed Thursday and only open part of the day Friday. Items such as durable goods and existing home sales will be released, but most people on Wall Street will be too busy shopping on Amazon and making Jeff Bezos more wealthy to pay much attention.
Interesting holiday spending data and projections here.
Short term: The S&P 500 dared to fall below the 20 day moving average on a closing basis Wednesday — for the first time since August!
The Russell 2000 was week the prior week and a half but rallied nicely Thursday and Friday.
The NYSE McClellan Oscillator has been in the red for quite a few weeks so that puts us in a cautious mood. It is at its highest level in a few weeks so a near term rally might turn it back to black next week – after all it’s Thanksgiving week!
Long term: Unicorns and rainbows continue.
Charts of interest / Big Movers:
On Monday, General Electric (GE) skidded 7.2% after the conglomerate announced plans to cut its dividend by half, with the company saying the move will help its effort to drive up growth and value for shareholders. Boy, for a blue chip this chart looks just about opposite of the major markets!
Mattel (MAT) jumped 21% in the wake of a report late Friday that rival toy maker Hasbro (HAS) had made a takeover offer.
Tuesday, Buffalo Wild Wings (BWLD) ended up 24% as The Wall Street Journal reported on Monday that a private-equity firm had bid more than $2.3 billion for the restaurant chain.
Advance Auto Parts (AAP) rose more than 16% Tuesday after reporting a profit beat that offset a sales miss.
Wednesday, Target (TGT) dropped 9.9% after the retailer’s fiscal third-quarter profit and sales beat expectations, but the company offered a downbeat profit outlook for the current quarter and said it expected a “highly competitive” environment for holiday sales. It did gain much of that back Friday.
Meanwhile Walmart (WMT) climbed 11% Thursday in the wake of the retailer posting stronger-than-expected earnings.
NetApp (NTAP) soared 16% after the data-storage company’s better-than-expected results late Wednesday.
Friday, Foot Locker (FL) jumped 28% after the athletic footwear retailer reported fiscal third-quarter profit and sales that fell less than expected.
Have a great week and we’ll see you back here Sunday!