Monday November 27, 2017 – Friday December 1, 2017
On Monday new home sales for October rose 6.2% to an annualized 685,000 units, much higher than expected. Markets didn’t do much overall, but retail stocks were up on expectations of a good holiday shopping season.
On Tuesday, the Case-Shiller home price index for September rose .5%, and consumer confidence for November soared 3.3 points to 129.5, a 17 year high. North Korea launched a ballistic missile, but markets paused only for a short time before rallying sharply on optimism over tax reform. The Dow Industrials closed 255 points higher and closed at a record high, along with the S&P 500 and Nasdaq composite.
On Wednesday, the second estimate of the third quarter GDP was revised upward slightly to 3.3%, and the pending home sales index for October rose 3.5%. The EIA petroleum status report for the week ending November 24th saw crude oil inventory drop by 3.4 million barrels. The tech sector declined, while financial stocks gained. The Dow Industrials rose 103 points to a record high, but the S&P 500 and Nasdaq composite closed lower.
On Thursday, jobless claims for the week ending November 25th fell 2,000 to 238,000 and personal income for October rose .4% on top of the .4% gain from the prior month, consumer spending rose .3% compared to the prior month’s .9%, and the PCE price index rose just .1%. Markets continued to do well on tax reform optimism as the Dow Industrials closed 331 points higher to above 24,000 for the first time. West Texas Intermediate crude settled at $57.31 a barrel.
On Friday the ISM manufacturing index for November rose one-half point to 58.2 and markets opened modestly higher as investors waited to see if the Senate can pass a tax reform bill. Now let’s take a look at some stocks.
Barracuda Networks, Inc. (NYSE: CUDA) announced that it has entered into an agreement to be acquired by private equity investment firm Thoma Bravo, LLC. in an all-cash transaction valued at $1.6 billion. Barracuda shareholders will receive $27.55 per share. Barracuda Networks reached a new 52 week high of $27.75 per share this week.
Buffalo Wild Wings, Inc. (NASDAQ: BWLD) and Arby’s Restaurant Group, Inc. announced Tuesday that the companies have entered into a merger agreement under which Arby’s will acquire Buffalo for $157 per share in cash. The transaction is valued at approximately $2.9 billion, including assumption of debt. Buffalo Wild Wings shares were up over 5% on Tuesday.
Momo Inc. (NASDAQ: MOMO) announced on Tuesday, its financial results for its third quarter. Net income increased to $79 million, compared to $39 million in the same period last year. Net revenues increased 126% year over year to $354 million. Momo, however, fell to a low of $23.35 per share on a disappointing lack of growth in its live video-streaming business.
Autodesk, Inc. (NASDAQ: ADSK) reported results for its third quarter of fiscal 2018, with total annualized recurring revenue of $1.9 billion, an increase of 24% year-over-year. Subscription plan subscriptions increased 307,000 from the second quarter to 1.9 million at the end of the third. The company’s stock declined over $15 per share on the news.
The Michaels Companies, Inc. (NASDAQ: MIK) announced financial results for its third quarter with gross profit increasing 3.8% to $484 million, compared to $466 million a year ago. Operating income increased 5.1% to $153 million, or 12.4% of sales, compared to $146 million a year ago. The company’s shares reached a high of $23.16 Thursday morning.