News for the Week of January 8-12, 2018

News for the Week of January 8 – January 12, 2018

 

by David Abuaf, CFA

Investment Manager, RJFS

 

General Markets / Economic

                                                                                                           

1.     The 10-year inflation break-even rate settled at 2.027%, its highest level in months, highlighting investors’ renewed economic enthusiasm

2.     China reported a record annual trade surplus with the US for last year

3.     The ECB indicated it might move sooner than investors had expected to phase out its bond-buying program

4.     Chinese passenger-car sales grew at their slowest pace in at least 15 years.

5.     Corporate boards are seeking greater insight into cybersecurity risks in the aftermath of the recent breach at Equifax

6.     Chinese authorities ordered the closing of operations that create a large share of the world’s bitcoin supply, tightening a clampdown

 

 

Company News

 

1.     GoPro will slash its workforce and exit the drone market

2.     Facebook and Xiaomi are teaming up to launch a virtual-reality headset in China

3.     Pfizer said it would stop trying to discover new drugs for Alzheimer’s and Parkinson’s

4.     Celgene agreed to buy cancer biotechnology concern Impact Biomedicines for as much as $7B

5.     Facebook is overhauling the way it presents news and information on its platform, as the firm struggles to address criticisms about content

6.     Xerox is in talks to potentially do a major deal with Japan’s FujiFilm, as the US document pioneer struggles to reinvent itself

 

 

 

 

 

Commentary for the Week of January 8 – January 12, 2018

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

 

Stocks have started the year with a nearly uninterrupted run – one that has us imagining just how high the market can go. The S&P 500 has now gained 4.2% in just two weeks of trading, a pace that would have it triple by the end of the year.

 

But how high could the S&P 500 really go? Well, according to earnings reports from last week, numbers seem very positive, especially with an added boost from tax cuts.

 

RBC Capital Markets strategist Lori Calvasina argues that with the benefit of tax reform, the aggregate earnings per share of the benchmark could grow 17% in 2018…I’m calmly bullish.”

 

Investors for their part, are just plain bullish. The American Association of Individual Investors survey showed that 48.7% of respondents use that word to describe themselves, a big drop from the previous week’s 59.8%, but still well above the historical average of 38.5%. And that optimism may be translating into action.

 

 

 

 

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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