Monday January 15, 2018 – Friday January 19, 2018
Markets were closed Monday due to the Martin Luther King Jr. holiday.
On Tuesday, the Empire State manufacturing survey for January fell 1.9 points to 17.7. Congress worked to try and pass a spending bill to avoid a government shutdown on Friday, with haggling over immigration reform slowing down the process. At one point the Dow Industrials was up 283 points, but it gave up its gains and ended the day down 10 points. Ten year Treasuries ended the day yielding 2.54% and gold fell slightly to $1,338 an ounce.
On Wednesday, industrial production for December rose .9% compared to the prior month’s .1% decline, while the housing market index for January fell 2 points to 72. The Federal Reserve released its beige book for last December, showing most of the country experienced modest-to-moderate economic growth. Job growth and manufacturing growth was lowered slightly to a modest ranking, while some retailers did experience better-than-expected holiday sales. Some unexpectedly strong earnings reports from the financial sector, as well as Apple announcing it will repatriate $350 billion back to the U.S. prompted a rally and the Dow Industrials were up 322 points to close above 26,000 for the first time.
On Thursday, housing starts for December fell 8.2% to an annualized 1.192 million units, the EIA petroleum status report for the week ending January 12th saw crude oil inventory fall 6.9 million barrels, and jobless claims for the week ending January 13th fell 41,000 to 220,000. Markets fell as investors worried about the looming government shutdown and ten year Treasuries yielded 2.61%, the highest in more than 10 months.
On Friday consumer sentiment for January fell 1.5 points to 94.4 and markets were mixed as a possible government shutdown dampened investors’ optimism. Now let’s take a look at some stocks.
Citigroup Inc. (NYSE: C) on Tuesday, reported a fourth quarter net loss of $18.3 billion, or $7.15 per diluted share, on revenues of $17.3 billion. For the full year 2017, Citigroup reported a net loss of $6.2 billion on revenues of $71.4 billion. The year-over-year decline is attributed to a one-time non-cash charge taken as a result of recently enacted tax reform. Citigroup reached a high of $78.29 a share after the announcement.
On Wednesday morning, Bank of America Corp. (NYSE: BAC) reported its fourth-quarter results with revenue, net of interest expense, increasing 2% to $20.4 billion. Net interest income (NII) increased $1.2 billion, or 11%, to $11.5 billion, reflecting benefits from higher interest rates, as well as loan and deposit growth. Bank of America reached a high of $31.71 per share on Thursday, just shy of its current 52-week high.
Goldman Sachs Group, Inc. (NYSE: GS) announced its fourth quarter results, reporting a net loss of $2.1 billion, or $5.51 per share. The bank reported revenue of $7.83 billion, beating estimates slightly, however, trading revenues in the critical fixed income, currencies and commodities space dropped 50% from the same period last year. Overall trading revenue decreased 34%. Goldman Sachs reached a new low of $249.41 per share on Wednesday.
Morgan Stanley (NYSE: MS) reported for its fourth quarter revenue of $9.5 billion compared to $9.0 billion a year ago. Results also included a tax provision of $990 million due to the passage of the recent tax reform bill, which also lowers corporate tax rates from approximately 35% down to 21%. Morgan Stanley reached a new 52-week high of $55.99 per share on Thursday.
IBM (NYSE: IBM) announced fourth-quarter and full-year 2017 earnings results Thursday afternoon. For the quarter, cloud revenues increased 30% to $5.5 billion, while for the whole year cloud revenue was $17 billion. This includes $9.3 billion delivered as-a-service and $7.8 billion for hardware, software and services to enable IBM clients to implement cloud solutions. After the announcement, IBM fell over 4%, to under $162 per share during after-hours trading.