Monday January 29, 2018 - Friday February 2, 2018
On Monday personal income for December rose .4% on top of the prior month’s .3% gain, consumer spending rose .4%, and the PCE price index rose .1%. Ten year Treasuries’ yield rose to 2.7%, and equities markets sold off on profit taking and fears that higher interest rates will make stocks less attractive. The Dow Industrials closed down 177 points.
On Tuesday the Case-Shiller home price index for November rose .7% and consumer confidence for January rose 2.3 points to 125.4. The equites selloff intensified as interest rates continued to rise and Amazon, J.P. Morgan Chase and Berkshire Hathaway announced a partnership to cut health-care costs. The Dow Industrials closed down 362 points.
On Wednesday, the ADP employment report for January fell 8,000 to 234,000 and the employment cost index for the fourth quarter rose .6%. The pending home sales index for December rose .5% and the EIA petroleum status report for the week ending January 26th saw crude oil inventory rise 6.8 million barrels, its first rise in 11 weeks. The Federal Reserve finished its meeting and held interest rates steady by unanimous vote. In its announcement the Fed noted that inflation is expected to hit 2% this year and that household spending was upgraded from moderate to solid. Markets briefly sold off on the news, but ended the day up modestly.
On Thursday, jobless claims for the week ending January 27th fell 1,000 to 230,000, and nonfarm productivity for the fourth quarter declined .1% while unit labor costs rose 2%. The ISM manufacturer’s index for January fell two-tenths of a point to 59.1 and construction spending for December rose .7%. Ten year treasuries finished yielding almost 2.79% and equities closed mostly lower.
On Friday, nonfarm payrolls for January rose 200,000, higher than expected, and average hourly earnings rose .3%. The unemployment rate held steady at 4.1%. Markets opened sharply lower over worries that interest rates will go higher. Now let’s take a look at some stocks.
Microsoft Corporation (NASDAQ: MSFT) announced their fiscal second quarter financial results late Wednesday. Revenue increased by 12% to $28.9 billion and operating income increased 10% to $8.7 billion. Office consumer products and cloud services revenue increased 12% and Office 365 consumer subscribers increased to 29.2 million. Microsoft reached an all-time high of $96.07 per share on Thursday.
Facebook Inc. (NASDAQ: FB) reported on Wednesday that recently enacted tax changes impacted fourth quarter and full year 2017 results as income taxes increased by $2.27 billion. Daily active users increased 14% year over year at an average of 1.4 billion for December. Facebook hit an all-time high of $195.32 per share on Thursday.
Alibaba Group Holding Limited (NYSE: BABA) announced results for its fiscal third quarter. Total revenue was $12.7 billion, an increase of 56% year-over-year while revenue from cloud computing increased 104% year-over-year to $553 million. Digital media and entertainment revenue increased 33% year-over-year to $832 million.
Amazon.com, Inc. (NASDAQ: AMZN) reported financial results for its fourth quarter on Thursday. Operating cash flow for 2017 increased 7% to $18.4 billion and net sales increased 38% to $60.5 billion. Operating income increased 69% to $2.1 billion.
Alphabet Inc. (NASDAQ: GOOGL) announced financial results for its fourth quarter and full year. The company reported revenue of $110.9 billion, up 23% year over year, while fourth quarter revenue rose to $32.3 billion, up 24% year over year.
Apple, Inc. (NASDAQ: AAPL) posted fiscal first quarter revenue of $88.3 billion, an increase of 13% from a year ago. Quarterly earnings per diluted share were $3.89, up 16%. International sales accounted for 65% of the quarter’s revenue. Both revenue and earnings per share reached all-time records.