Monday May 22, 2017 – Friday May 26, 2017
On Monday, defense stocks were winners as the Trump administration signed a $350 billion arms deal with Saudi Arabia, and the White House released its budget proposal, cutting federal spending by $3.6 trillion over the next decade, with most agencies experiencing a trimming. The Dow Industrials closed 89 points higher.
On Tuesday, new home sales for April were down 11.4% to a lower than expected annualized rate of 569,000 units. U.S. 10-year Treasury notes yielded 2.29% and West Texas Intermediate crude settled at $51.74 a barrel. Markets closed up slightly.
On Wednesday, existing home sales for April fell 2.3% to an annualized 5.57 million units, and the EIA petroleum status report for the week ending May 19th saw crude oil inventories fall 4.4 million barrels, for a seventh straight week of declines. The Federal Reserve released minutes from its May 3rd meeting and they contained details about how the Fed will divest its $4.5 trillion portfolio that it accumulated through stimulus policies after the financial crises. Basically, as bonds in the portfolio mature, a certain percentage will not be repurchased by the Fed. The percentage allowed to roll off will increase over time. Fed members also said they expect economic weakness in March to be temporary, and thus, rate hikes would be resuming soon. Markets were up modestly, with the S&P 500 closing a record high.
On Thursday, jobless claims for the week ending May 20th rose 1,000 to 234,000, and U.S. crude fell almost 5% to $48.90 a barrel when OPEC disappointed investors by not cutting production further. The Nasdaq composite and S&P 500 closed at record highs.
On Friday durable goods orders for April were down .7%, compared to the prior month’s 2.3% gain, and the first quarter GDP was revised upward to 1.2%. Markets opened slightly lower on the news. Now let’s take a look at some stocks.
On Wednesday, Puma Biotechnology (NASDAQ: PBYI) announced that an advisory committee of the FDA voted 12-4 to recommend approval of neratinib to treat early stage breast cancer. The drug was found to offer a 33% relative reduction of recurrence within two years. Share prices on Wednesday surged to over $74 a share and continued to climb on Thursday reaching a new 52 week high of $80 a share.
Momo Inc. (NASDAQ: MOMO), a Chinese mobile social networking platform, reported first quarter revenue increased 421% year over year to $265 million, beating analyst projections of $242 million. The company’s stock was reached over $44 per share Tuesday morning but fell to below $40 as investors sold on the positive earnings release.
Tata Motors Ltd. (NYSE: TTM) reported fourth quarter fiscal earnings showing higher wholesale volumes as well as marketing costs. The company’s luxury brand Jaguar Land Rover showed an 18% increase in profit after tax. Shares rallied to over $37, even though net profit fell 17%.
Tiffany & Co. (NYSE: TIF) on Wednesday reported worse-than-expected first quarter sales and an unexpected drop in same store comparable sales, sending its shares down more than 8%. The company has been struggling to attract younger customers and tourists in the Americas. Share prices fell to as low as $84.45 on Wednesday morning.
On Thursday, Best Buy Co., Inc. (NYSE: BBY) reported an unexpected increased in first-quarter comparable-store sales of 1.6%, a closely watched indicators for retailers, sending the company’s shares up more than 18%. Total revenue rose 1% to $8.53 billion in the quarter ending April 29th, while net income came in $188 million, or 60 cents per share.