March 17, 2014 – March 21, 2014
Monday started off the week with a strong rally as the situation in Ukraine passed without any violence. In addition, Industrial Production was up .6% for February, reversing the -.2% decline in January.
On Tuesday, the markets closed still higher after hearing Vladimir Putin’s speech claiming he wasn’t interested in further dividing Ukraine, even though Crimea is about to be annexed by Russia.
The Consumer Price Index was released showing tame inflation for February, at .1%, right at about expectations. Also, Housing Starts for February were down .2% from January and down 6.4% compared to a year ago, however, new housing permits jumped 7.7%, leading to hope that the housing market will soon gain strength.
Wednesday the market gave up some gains when the Fed announced the results of its meeting. Bond purchases will be cut by another $10 billion to $55 billion per month. Fed Chair Janet Yellen suggested that interest rate hikes might happen about six months after the asset purchase program ends. In addition, the Fed dropped the unemployment rate as a primary indicator of the strength of the economy when determining the timing of interest rate hikes.
On Thursday, all was forgiven and the market gained back most of the losses. The leading indicators for February showed an increase of .5%, stronger than expected, and the Philadelphia Fed Survey for March showed a very large improvement in manufacturing over February. Friday was a quadruple witching day, so named due to index futures, index options, stock options and stock futures simultaneously expiring.
Now let’s take a look at some stocks.
Toyota Motor Corporation (NYSE: TM) announced they finally reached a settlement with the Department of Justice to settle a 4-year criminal investigation under which Toyota was accused of withholding information from the public as well as misleading investigators. Toyota has agreed to pay a $1.2 billion penalty to end the scrutiny behind their vehicles sudden and unintentional acceleration, which led to the recall of more than 10 million vehicles. This incident is currently the largest criminal penalty ever sustained by an automaker in the US.
KB Home (NYSE: KBH), one of the nation’s largest home-builders, released their first quarter results early Wednesday and shares gained approximately 8% in value after the report indicated that KB experienced an 11% growth in quarterly revenue year over year. The company had net profits at $10.6 million a significant increase compared to the year-ago loss of $12.5 million. KB was able to beat analysts’ projections of $445 million in revenue and earnings of $0.08 per share. The positive earnings report sparked a sector rally on hopes that home-building is beginning to rebound after the collapse of the housing sector.
First Solar, Inc. (NASDAQ: FSLR) made numerous announcements on Wednesday as the stock ran up over 20% during trading. First Solar announced that the company expects their full-year earnings to be between $2.20 and $2.60 per share and $4.50 and $6 per share for 2015. The company also announced 2 major partnerships, the first with General Electric (NYSE: GE) to create a solar power plant, the second with Jordan, building a 53-megawatt solar power plant which will be Jordan’s biggest plant upon completion and will contribute approximately 1% to the country’s total generating capacity.