Wall Street Breakfast: What Moved Markets This Week

by: Wall Street Breakfast

Stocks ended the week strong on growing confidence that the weekend meeting between President Trump and China leader Xi Jinping will cool off trade tensions even if a comprehensive deal isn't struck. For the week, the Dow rallied 5.6% for its biggest one-week gain since November 2016, and the S&P 500 jumped 4.8% in its best weekly performance since 2011. The Nasdaq ended the week up 3% as tech stocks also recovered. Oil prices fell back again on Friday to end November with a drop of about 22% to mark the biggest monthly percentage loss in a decade.

Economy

Monday:

Cyber Monday sales topped $7.9B (19.7% growth Y/Y), according to Adobe Analytics, making it the single largest shopping day in U.S. history. In comparison, Thanksgiving Day and Black Friday brought in $3.7B (28% growth Y/Y) and $6.2B (23.6% growth Y/Y) in revenue, respectively. Sales coming from smartphones also hit an all-time high of $2B and the "Buy Online, Pickup In-Store" trend spiked 50%.

Tuesday:

Stock market sentiment felt some pressure after President Trump said he expected to raise tariffs on $200B of Chinese goods to 25% (from the current 10%) on Jan. 1. He also declared that he's ready to apply a further round of levies on $267B worth of imports, including iPhones and laptops, starting next year. In response, China's foreign ministry urged the U.S. to work toward a positive outcome at this weekend's G20 meeting.

Wednesday:

U.S. equity indexes had a stellar session, with the DJIA closing up over 600 points, following a dovish speech by Jerome Powell. He said the Fed's benchmark interest rate was "just below" neutral, marking a step away from comments made in recent months. In other news, the European Union announced its intention to become the first major economy to go "climate neutral" by 2050.

Thursday:

Crude prices dropped below $50 a barrel for the first time since October 2017, amid data from the EIA showing U.S. crude stockpiles increasing for the tenth consecutive week. As a result, oil is likely to be a hot topic at the G20 summit. Shielded by a budget surplus and a weak ruble, Vladimir Putin previously said current prices are fine for Russia, but Crown Prince Mohammed bin Salman, under pressure over the Khashoggi killing, can't afford to alienate President Trump and his demand for lower prices.

Friday:

Markets continued to watch trade developments between the world's two largest economies. President Trump and China's Xi Jinping were expected to meet on the sidelines of the G20 summit, with the two leaders set to have a dinner meeting with staff on Saturday evening. Mexico, Canada and the U.S. also signed the newly renegotiated USMCA trade agreement as leaders gathered in Argentina.

Stocks

Monday:

"(We have) no plans to do anything like that," Ford (NYSE:F) Canada CEO Mark Buzzell told reporters following General Motors' (NYSE:GM) closure of the Oshawa Assembly plant in Ontario. GM also announced plans to shutter two facilities in Detroit and Ohio, drawing criticism from President Trump. Beset by a declining sedan market, as well as the electric and autonomous revolution, GM further cut production of slow-selling models and slashed its North American workforce by 15%.

Tuesday:

Microsoft surpassed Apple as the world's largest public company, reaching a market cap value of $812.9B. Apple's (NASDAQ:AAPL) stock has seen phenomenal growth over the past five years, culminating in a $1T valuation earlier this year, but investors are concerned about slowing iPhone sales and Wall Street estimates for the holiday quarter. While iPhones make up nearly 60% of Apple's entire revenue, Windows, Xbox, and Surface make up just 36% of Microsoft's (NASDAQ:MSFT) sales.

Wednesday:

CRISPR Therapeutics shares were on the rise again after Chinese researcher He Jiankui - who altered the genes of newly born twin girls to make them HIV resistant - stood by his work and revealed a second pregnancy in the controversial project. His revelations have sparked a major debate on the ethical boundaries of gene editing and Crispr-Cas9 (NCRSP), which promises to eliminate human diseases, but could also be used to create designer babies.

Thursday:

After a decade at the helm of Unilever (UL, UN), CEO Paul Polman announced his retirement. He'll be replaced by Alan Jope, head of the company's beauty unit, from Jan. 1. Polman angered shareholders earlier this year with a plan to move Unilever's headquarters to the Netherlands, but an investor rebellion forced him to abandon the idea.

Friday:

Marriott shares tumbled after revealing that its Starwood guest reservation database was breached, potentially exposing information on about 500M guests. Among the Marriott (NYSE:MAR) data taken included names, mailing addresses, phone numbers, email addresses, passport numbers, date of birth and gender. For some, the information also includes payment card numbers and payment card expiration dates.

Weekly Market Movement Wrap

U.S. Indices
Dow +5.2% to 25,538. S&P 500 +4.8% to 2,760. Nasdaq +5.6% to 7,331. Russell 2000 +3.1% to 1,534. CBOE Volatility Index -16.% to 18.07.

S&P 500 Sectors
Consumer Staples +2.9%. Utilities +2.7%. Financials +3.8%. Telecom +5.5%. Healthcare +5.8%. Industrials +4.%. Information Technology +6.1%. Materials +2.4%. Energy +3.5%. Consumer Discretionary +6.4%.

World Indices
London +0.4% to 6,980. France +1.2% to 5,004. Germany +0.6% to 11,257. Japan +3.3% to 22,351. China +0.3% to 2,588. Hong Kong +2.2% to 26,507. India +3.5% to 36,194.

Commodities and Bonds
Crude Oil WTI +0.6% to $50.7/bbl. Gold -0.1% to $1,227.8/oz. Natural Gas +7.6% to 4.637. Ten-Year Treasury Yield +0.3% to 119.67.

Forex and Cryptos
EUR/USD -0.21%. USD/JPY +0.55%. GBP/USD -0.52%. Bitcoin +2.9%. Litecoin +10.5%. Ethereum -1.3%. Ripple -1.7%. Bitcoin-Cash flat.

Top Stock Gainers
Arsanis (NASDAQ:ASNS) +214%. Adial Pharmaceuticals (NASDAQ:ADIL) +189%. Borqs Technologies (NASDAQ:BRQS) +170%. Tyme Technologies (NASDAQ:TYME) +82%. Alliqua Biomedical (NASDAQ:ALQA) +69%.

Top Stock Losers
Ferroglobe Plc (NASDAQ:GSM) -53%. Zafgen (NASDAQ:ZFGN) -45%. Greenpro Capital Corp. (OTCQB:GRNQ) -34%. Tenax Therapeutics (NASDAQ:TENX) -34%. Cheetah Mobile (NYSE:CMCM) -28%.

Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section.