October 27, 2017 Weekly Market Recap

GO ASTROS!!! OK, now that I got that out of the way – stocks began the week on a lower note as investors cashed in on last week’s record highs, but reclaimed their losses on Friday, thanks to an impressive batch of technology earnings. Simply put, Tech crushed it. The major indices finished the week in positive territory, with the Nasdaq, the Dow, and the S&P 500 adding 1.1%, 0.5%, and 0.2%, respectively. The S&P 500 and the Nasdaq settled Friday at new all-time highs.

October 27, 2017 Weekly Market RecapThe S&P 500’s technology sector (+2.9%) kept the broader market afloat with little help from its peers, easily settling at the top of the sector standings. The group was underpinned by Microsoft (MSFT), Alphabet (GOOG), and Intel (INTC), which added between 4.8% and 7.4% on Friday after reporting better-than-expected earnings and revenues for the third quarter.

Amazon (AMZN) also surged on Friday, jumping 13.2%, after beating both top and bottom line estimates. The company’s positive performance boosted the consumer discretionary sector, which finished the week with a gain of 1.1%.

On the downside, the health care sector (-2.1%) struggled this week, with biotechnology names leading the retreat. Celgene(CELG) showed particular weakness, ending the week lower by 19.1%, after missing revenue estimates for the third quarter and lowering its 2020 long-term financial targets on Thursday.

The consumer staples sector also lagged, moving lower by 1.5%. Within the group, CVS Health (CVS) plunged 9.8% following unconfirmed reports that the pharmacy retailer has made an offer to acquire managed health care company Aetna (AET) for more than $200 per share. Aetna shares ended the week higher by 7.6%.

On the data front, the advance GDP report showed that the U.S. economy increased at an annual rate of 3.0% in the third quarter, marking the second straight quarter the annualized rate has been 3.0% or higher.

Elsewhere, speculation as to who will become the next Fed Chair continued this week, and it appears increasingly likely that current Fed Chair Janet Yellen will be replaced by either Fed Governor Jerome Powell or Stanford University economist John Taylor. Bloomberg reported on Friday that President Trump is leaning toward Mr. Powell.

Following this week’s events, the CME FedWatch Tool places the chances of a December rate hike at 99.9%, up from 93.1% last week.

Source: Briefing Investor

Mike Minter

Mike develops investment portfolio allocations, handles trading and rebalancing, and conducts research and analysis as a Portfolio Manager and Financial Advisor for the firm. As a perpetual student of investing and the markets, Mike considers himself obsessed with the subject. Mike has earned the CERTIFIED FINANCIAL PLANNER™ (CFP®) and Certified Fund Specialist® designations. He is also an active member of the Houston chapter of the Financial Planning Association (FPA).

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