Thanksgiving week is usually great for bulls and this last week was no exception. Gobble gobble. Most of the gain for the week was concentrated in the rally Tuesday (in the opening hour!); it was quiet otherwise. A little post Thanksgiving pop happened Friday morning as well. And that was your week folks.
News flow was SLOW. Federal Reserve minutes Wednesday were a “highlight”:
The Fed viewed a “near-term” increase in interest rates as possible but central bank officials also expressed concerns about persistently low inflation, hinting that the bank may dial back its rate increases in 2018. The language from the Fed’s Oct. 31-Nov. 1 meeting was comparatively softer than in the September discussions, reflecting worries that tepid inflation might also be a result of “developments that could prove more persistent,” according to the Fed minutes. The minutes also showed that several members worried that keeping interest rates too low could create a financial bubble.
Durable-goods orders fell 1.2% in October, well below the forecast of a 0.7% gain. Excluding transportation orders increased 0.4%.
This week in the crypto world, the global market cap has officially broke $300 billion according to CoinMarketCap.com, which is nearly $50 billion more than Visa (V). Which would you rather own? Bitcoin is trading over $9,000. Amazing.
Random Chinese software stock – congrats if you had the foresight to own it 6 weeks ago. 😀
This is an example of moving averages needing some time to catch up to price… and then “boom”.
I will keep coming back to this housing ETF chart because it’s been so wow. Forget the 20 day moving average, this ETF has been riding it’s 10 day moving average for nearly 3 months now.
Here is the 5 day weekly “intraday” chart of the S&P 500 .. NOT via Jill Mislinski.
It was another great week for emerging stocks – Bespoke has some data on the great year.
Let’s start off with performance and the fact that the largest stocks in the ETF have been on fire this year. Of the twenty stocks shown, just one- China Mobile (-0.27%)- is down on the year! Overall, the twenty stocks are up an average of 51.8% YTD with three up by triple-digits and a total of eight up by over 50%! Keep in mind too, that these aren’t small-cap stocks we’re talking about. Tencent is the fifth largest publicly traded company in the world with a larger market cap than Facebook (FB), and Samsung has a similar market cap to Exxon Mobil (XOM)!
On a regional basis, rather than being geographically diversified, EEM is extremely Asia centric. Nine of the ETF’s top holdings are from Asia, and China alone accounts for a total weighting in the ETF of 29.5%. In total, more than two-thirds of the companies in EEM are based out of Asia, and the largest non-Asian country is Brazil at 7.53%.
The week ahead…
Federal Reserve chairwoman Janet Yellen testifies to Congress on the US economic outlook on Wednesday, a day after Jerome Powell, nominated to succeed in February, will appear in confirmation hearings before the Senate.
ISM Manufacturing will be released Friday (expected 58.3). If you are into the oil play OPEC is meeting Nov 30th, with an expected announcement to extend production curbs.
Short term: The S&P 500 has not budged much in the month of November as it worked off a nice move in October. The NASDAQ has been taking the reigns a bit here of late.
The Russell 2000 had been the weakest of the 3 indexes but a nice 4 day move has it at a record now too.
The NYSE McClellan Oscillator has turned back into the black. We noted in our recap last week that it was close to turning and any near term rally would flip the script so indeed that happened. So the caution of the past month can go back out the door for now.
Long term: Unicorns and rainbows continue.
Charts of interest / Big Movers:
Cavium (CAVM) jumped 11% Monday following news that Marvel Technology has signed a deal to buy the fellow chip maker for about $6 billion.
Tuesday, Signet Jewelers (SIG) tumbled more than 30% after posting weaker-than-expected earnings before the open.
Hewlett Packard Enterprises (HPE) fell 7.2%, logging the S&P 500’s largest drop Wednesday. The corporate-tech giant said late Tuesday that CEO Meg Whitman is departing and gave a disappointing first-quarter outlook. So much for Meg’s EBAY magic…
Deere (DE) rallied 4.3% after the maker of tractors and combines posted better-than-expected quarterly results. Heck of a rally!
Nice pop there in oil to end the week.
Have a great week and we’ll see you back here Sunday!