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US Stocks Ended Feb. 17, 2017
Strong economic data, positive commentary from Federal Reserve Chairwoman Janet Yellen, and robust corporate profits led the S&P 500 higher for the week, marking the fourth consecutive weekly gain. Janet Yellen signaled the central bank might raise interest rates in March, citing rising inflation and a strong job market. Wholesale prices increased by 0.6% in January, the largest monthly increase since September 2012, led by an increase in gasoline prices. Consumer data points remained strong as retail sales advanced 0.4% versus consensus of 0.1%, and U.S. housing starts exceeded expectations. With earnings season nearing completion, the S&P 500 is on pace to grow by 5% for the 4th quarter of 2016. To date, information technology and financials grew earnings by 11.2% and 9.1% in the 4th quarter, while energy remained a drag with earnings down by 9.3%. However, energy earnings are expected to recover and be incremental to S&P 500 profits in 2017. In stock specific news, Deere & Co. continued to see weak demand for its capital equipment for the quarter, but did raise 2017 sales guidance for farm and construction machinery as management sees end markets stabilizing after a three-year slide. CBS Corp. saw advertising revenue fall by 2.8% due to fewer Thursday Night Football games and disappointing ratings for NFL games. Unilever N.V. spurned a $143 billion takeover offer from Kraft Heinz Co. that would be the largest-ever acquisition for a food or beverage stock. Both stocks jumped by more than 10% on Friday as further consolidation among consumer-goods companies could result in further cost cutting and shareholder value. Looking ahead to next week, a number of retailers will report earnings including Macy's Inc., Nordstrom, Inc., and Wal-Mart Stores. Economic data is relatively light for the holiday-shortened week.
Tuesday, February 21, 2017 @ 8:21 AM
These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.