Monday, October 1, 2018 – Friday October 5, 2018
On Monday the PMI manufacturing index for September increased nine-tenths of a point to 55.6 however the ISM manufacturing index decreased 1.5 points to 59.8. Construction spending for August rose .1% on top of the prior month’s .2% gain. Markets rallied as the U.S. and Canada finalized a trade deal to replace NAFTA, called the United States-Mexico-Canada Agreement.
On Tuesday markets were mixed as stocks sensitive to trade issues continued to rally and the Dow Industrials closed at a record high. However, retailers declined after Amazon announced a minimum wage increase for all its employees.
On Wednesday motor vehicle sales for September rose 4.8% to an annualized 17.4 million units, and the ADP employment report for September was very strong at 230,000 jobs. The ISM non-manufacturing index for September rose 3.1 points to 61.6, a record high, and the EIA petroleum status report for the week ending September 28th saw crude oil inventory rise 8 million barrels. 10-year Treasuries shot up nine basis points to 3.15% on the strong economic news. Markets remained mixed, however the Dow Industrials closed at a record high.
On Thursday, jobless claims for the week ending September 29th declined 8,000 to 207,000 and factory orders for August increased 2.3%. The yield for Ten-year Treasuries increased again to close at 3.19%, its highest level since 2011 and stocks fell sharply with the Dow Industrials losing 200 points and the Nasdaq Composite dropping 1.8%.
On Friday nonfarm payrolls for September rose 134,000, much lower than expected, and the unemployment rate dropped to 3.7%. Average hourly earnings rose .3%. The 10-year Treasury yield rose to 3.22% and markets opened lower. Now let’s take a look at some stocks.
Tesla Inc.’s (NASDAQ: TSLA) CEO, Elon Musk, settled with the SEC on Monday. Last week, the SEC charged Musk with securities fraud over his series of tweets about taking the company private. In the agreement, Tesla and Musk will both pay a $20 million fine and Musk will step down as Chairman. Musk accepted the terms of the deal without admitting or denying guilt. Tesla shares jumped 15% on Monday.
General Electric Co. (NYSE: GE) removed John Flannery as Chairman and Chief Executive Officer on Monday after only a year in the position. Lawrence Culp succeeded Flannery, effective immediately. Additionally, the GE board appointed Thomas Horton as the Lead Director. Horton and Culp were members of the Board since April of this year. GE shares rose 13% on Monday following the management changes.
PepsiCo, Inc. (NASDAQ: PEP) reported its third quarter results on Tuesday and topped estimates, but provided a weaker than expected guidance. Pepsi reported earnings per share of $1.59 on revenue of $16.5 Billion. Pepsi forecast revenue to grow 3% for the full year with earnings of $5.65 per share. Pepsi shares fell 2.7% on Tuesday.
Barnes & Noble, Inc. (NYSE: BKS) announced a review process to evaluate strategic alternatives on Wednesday. A special committee was formed to explore the review process, established after interest from multiple parties to acquire the company. Barnes & Noble shares rose 22.8% on Thursday morning.
Constellation Brands, Inc. (NASDAQ: STZ) reported its fiscal second quarter results and topped analysts’ estimates. The Company reported net sales of $2.3 billion, increasing 10% year over year and earnings of $2.87 per share, increasing 16% year over year. Constellation said the stronger quarter was led by strong growth in its beer segment. Shares were trading 5% higher on Thursday.