Stocks kick off holiday season in festive mood

Despite the Thanksgiving-shortened trading schedule, the US stock market last week enjoyed its biggest Friday-to-Friday gain since October 6. The S&P 500 (SPX) pushed to a new record high and close on Friday, ending the week near the top of its range at 2602.42 for a 0.91% gain on the week.

Small-caps and tech had even better runs, with the Russell 2000 (RUT) rallying 1.76% for the week and the Nasdaq 100 gaining 1.5%. The Dow Jones Industrial Average (INDU) closed 0.86% higher.

Last week’s batch of mixed (but mostly positive) US economic reports was highlighted by the release of the FOMC Minutes on Wednesday. Bottom line: Despite some internal debate regarding the wisdom of raising interest rates while inflation remains low, odds still favor a December rate hike.1

S&P 500 (SPX), December 12, 2016 – November 24, 2017

Source: OptionsHouse

Most of last week’s gains came in two bursts, on Tuesday and Friday. The top-performing S&P sectors for the week were Telecom Services (+1.8%), Information Technology (+1.76%), and Industrials (+1.2%).

“Worst-performing” was a very relative concept last week, as all S&P 500 sectors were in positive territory. But the weakest of the bunch were Consumer Staples (+0.03%), Utilities (+0.05%), and Financials (+0.19%).

The market’s push to new highs produced the expected decline in the CBOE Volatility Index (VIX), which closed Friday back in single digits at 9.67.

S&P 500 (SPX), November 13 – November 24, 2017

Source: OptionsHouse

This week’s dwindling list of earnings releases is offset by a fairly full calendar of economic reports, with GDP on Thursday and manufacturing numbers on Friday taking the spotlight. One factor to keep in mind this week is the tendency for isolated days of weak trading, as mentioned in Wednesday’s Active Trader commentary.

Earnings on tap this week include MTS Systems (MTSC), Tech Data (TECD), and Thor Industries (THO) on Monday; Bank of Nova Scotia (BNS), Leju Holdings (LEJU), Nomad Foods (NOMD), China Lodging (HTHT), and Marvell (MRVL) on Tuesday; Royal Bank of Canada (RY), Tiffany & Co. (TIF), PVH (PVH), Semtech (SMTC), and Synopsys (SNPS) on Wednesday; CIBC (CM), Donaldson (DCI), Toronto-Dominion Bank (TD), Ambarella (AMBA), Ulta Beauty (ULTA), VMware (VMW), and American Woodmark (AMWD) on Friday.  

Several futures contracts wrap up trading this week: December natural gas futures (NGZ17), November gold (GCX17), November copper (HGX17), November palladium (PAX17), November platinum (PLX17), November silver (SIX17) on Tuesday; November 30-day Fed funds (FFX17), December RBOB gasoline (RBZ17), December heating oil (HOZ17) on Thursday; December platinum (PLZ17) on Friday.

This week’s US economic releases: New Home Sales (Monday); S&P Corelogic Case-Shiller HPI (Tuesday); GDP (Wednesday). Personal Income and Outlays (Thursday); PMI Manufacturing Index, ISM Manufacturing Index, Construction Spending (Friday).


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1 Econoday. FOMC Minutes. 11/22/17.