Monday, October 15, 2018 – Friday October 19, 2018
On Monday retail sales for September rose .1% on top of the prior month’s .1% gain. The Empire State manufacturing survey for October rose 2.1 points to 21.1. Business inventories for August rose .5% on top of the prior month’s .7% gain. Tech stocks led markets down and the Dow Industrials closed 89 points lower.
On Tuesday industrial production for September increased .3%, the housing market index for October rose 1 point to 68, and the JOLTS job openings report for August increased almost 1% to a record 7.136 million. Markets soared as some large companies released strong quarterly earnings. The Dow Industrials gained 547 points and the Nasdaq Composite rose 2.9%.
On Wednesday housing starts for September declined 5.3% to an annualized 1.201 million units and the EIA petroleum status report for the week ending October 12th saw crude oil inventory rise 6.5 million barrels. The Federal Reserve released minutes from its meeting last month and held steady with the need to continue raising rates. Policymakers discussed the possibility of at some point raising rates beyond normalization levels if the economy becomes overheated. In addition, the word accommodative was removed from the description of policy because Fed members thought it would create a false sense of precision of what exactly the neutral policy rate should be. Markets were mixed on the news, and the yield on 10-year Treasuries rose to 3.19%.
On Thursday jobless claims for the week ending October 13th fell 5,000 to 210,000. Markets fell sharply as investors were nervous over rising interest rates, and trade tensions with China. China’s economy reported a slowing GDP and concerns are rising that it could drag down global growth. The Dow Industrials closed down 327 points.
On Friday existing home sales for September fell 3.4% to an annualized 5.15 million units. Markets opened sharply higher on strong corporate earnings. Now let’s take a look at some stocks.
On Monday, Adobe Inc. (NASDAQ: ADBE) announced at its Adobe Max event updates to its Creative Cloud application. Along with the updates, Adobe introduced a new editing application: Adobe Premiere Rush. At the event, GoPro also announced news that it will be collaborating with Adobe to bring its video clips to the Adobe Stock marketplace. Adobe shares traded 7.1% higher on Monday.
The Goldman Sachs Group, Inc. (NYSE: GS) reported its third quarter results on Tuesday and topped analysts’ estimates, sending shares 1% higher. The company reported revenue of $8.65 billion and earnings per share of $6.28. The stronger than expected quarter was driven by higher revenue in the bank’s Investment Banking and Investment Management units.
Netflix Inc. (NASDAQ: NFLX) reported its third quarter financial results after market close on Tuesday, with diluted earnings per share of 89 cents on revenue of $3.9 billion. The stronger than expected results were driven by its international user growth, as it added 5.9 million new users, for a total of 78.6 million users. Shares were up 7.2% on the news.
International Business Machines Corporation (NYSE: IBM) announced its third quarter results on Tuesday that missed analysts’ estimates and sent shares down more than 7%. The company had three previous consecutive quarters of revenue growth, but found itself again with declining revenue. IBM reported that revenue fell by 2% to $18.8 billion with $3.42 EPS.
Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk finalized his settlement with the SEC on Tuesday. Under the agreement, Musk and Tesla will both pay a $20 million fine and Musk will step down as Chairman. Along with the settlement, Musk announced he will also purchase $20 million worth of Tesla’s common stock.