Rattled the street this week. Sending the major averages into the close mixed from last Friday. Too many dramas took 197 points of the Dow, a .4% loss. The NASDAQ gave up 39 points or .17%. While the S&P 500 gained 23 points or .33%. Another refusal to lower interest rates by Fed Chair Jerome Powell was followed by the nomination of his successor Kevin Warsh. Given the incoming economic data I’m not sure additional rate cuts are necessary, but Powell needs to go. A lot of the “shine” was taken of the precious metals this week after Gold and Silver both plunged. What goes up must come down and the metals recent vertical run reminded me of the Dot-Bomb stocks in late 1999/early 2000. Ongoing geopolitical tensions involving Iran, Cuba and Greenland didn’t make Mr. Market or investors happy. On the plus side, the S&P 500 companies are turning in another stellar earnings season.
4th Quarter Show Me The Money
About 1/3 of the S&P 500 companies have reported so far. Earnings are running 9.1% ahead of estimates, pushing a 5th consecutive quarter of double-digit earnings growth should the current figure of 11.9% hold. While revenues are up 8.2%, a multiyear high so far, according to FactSet Research. Impressive numbers to be sure, that will go on to humiliate a lot of the so called experts should the quarter close with them.
Recession? What Recession?
The November Durable Goods Orders jumped 5.3% defying the doom and gloomers. While not a particularly important report. Its subcomponent Core Capital Goods ex-Aircraft most certainly is as it makes a good proxy for business spending. With a 5th consecutive quarter of double-digit earnings growth on tap. Corporations are investing with enthusiasm. Orders for core capital goods rose by 0.7% in November, 3.7% over the past five months, and by 5.5% year-over-year, to a record $78.4 billion. With 2025 GDP expected to finish in the 3.5% range and strong consumer spending. Don’t hold your breath waiting for an economic slowdown.
Have a great weekend everyone! See you next Friday.
Last Week’s Post: Couldn’t Climb Higher
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