News for the Week of October 16-20, 2017

News for the Week of October 16 – October 20, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

General Markets / Economic

                                                                                                           

1.     Trading volume has fallen this year even as stock indexes set records amid low volatility and the rise of passive investing

2.     Silicon Valley leaders plan to seek approval for a new stock exchange focused on long term investing

 

Company News

 

1.     Walmart is near a deal to add Lord & Taylor to its website, part of a broader effort to build an online mall to compete with Amazon

2.     GE’s chief is expected to unveil results of a global review that include thousands of job cuts and a global retrenchment

3.     The Nordstrom family suspended efforts to take the chain private after struggling to raise enough financing for a buyout

 

 

 

 

Commentary for the Week of October 16 – October 20, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

A week that could have been a nightmare instead finished like a dream. On Thursday - the 30th anniversary of Black Monday - the Dow briefly traded down more than 100 points, raising concerns of a repeat. But the market rallied back to close at a new high, and the decline became just the latest example of investors buying the dip.

 

For investors, there’s little evidence to suggest dips in the market shouldn’t be bought. Earnings have been solid, more than 70% of the 88 companies that have reported so far have topped estimates. And sales have been even better – 72% of those companies have reported better than expected revenue, well above the longer-term average of 59%.

 

Still, it took more than earnings to push the market higher last week. On Thursday night, Senate Republicans agreed to a budget framework that could allow a tax package to pass with only a majority of votes, rather than a filibuster proof 60. Michael Block of Rhino Trading Partners says, “we still say the line to tax cuts won’t be a straight one; optimism that this gets done quickly and without controversy is bubbling.”

 

But not too much optimism, as the it appears market still refuses to get too excited by anything. The Dow in fact, hasn’t gained more than 1% on any single day since September 11, and yet its managed to hit 53 new highs this year, the most since 1995.

 

 

 

 

 

All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services. All opinions are as of this date and are subject to change without notice.

 

This information is not a complete description of the securities, markets, or developments discussed and has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.

 

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