Markets: It was a big week to start the year, with gains across multiple sectors, with the Nasdaq 100 surging over 3%, the S&P and DOW up over 2%, and the Russell small caps up 1.5%.
“The Dow Jones Industrial Average gained 25% last year, marking the 10th time since 1950 that it scored an annual advance of that magnitude or more. What typically has happened after such banner years? The Dow has been higher in the next year on eight occasions posting a double-digit percentage rise six times.
The average next-year jump has been 12.6%, topping the 8.5% bump that you get on average overall. And its that factoid that has some strategists advising against getting gloomy solely because of 2017s huge advance.” (Source: MarketWatch)
Dividend Stocks Update: These high dividend stocks go ex-dividend this coming week: City Office (NYSE:CIO), Consolidated Communications (NASDAQ:CNSL), Manning & Napier Inc (NYSE:MN), Liberty Tax Inc (NASDAQ:TAX), ARMOUR Residential REIT Inc (NYSE:ARR).
Volatility: The VIX fell 16.5% this week, ending at $9.22, remaining far below historic values.
Currency: The USD fell vs. most major currencies this week, except the Swiss Franc and the Yen.
Market Breadth: 25 of the DOW 30 stocks rose this week, vs. 14 last week. 74% of the S&P 500 rose, vs. 54% last week. .
Economic News: “Nonfarm payrolls increased by 148,000 jobs, compared with economists expectation of a 190,000 rise. The numbers were also in contrast to Thursdays ADP data that showed private employers added a stronger-than-expected 250,000 jobs in December.
However, the rise in monthly wage gains pointed to labor market strength. Average hourly earnings rose 0.3 percent in December after gaining 0.1 percent in the prior month. That lifted the annual increase in wages to 2.5 percent from 2.4 percent in November.”
(Source: Reuters)“The U.S. economy added 2 million jobs in 2017. The US added almost 3 million jobs in 2014, 2.7 million in 2015 and 2.2 million in 2016. As unemployment moves to historic lows, job gains eventually slow down.”
Week Ahead Highlights: We’ll get a look at Holiday Retail sales, in addition to inflation, via the CPI reports.
Next Week’s US Economic Reports:
Sectors: It was a broad-based sector rally this week, with the red hot Energy and Basic Materials sectors leading, followed by Tech, Consumer Discretionary, and Healthcare, while Utilities and Real Estate lagged.
Futures: WTI Crude futures gained 1.87% this week, but Natural gas futures fell -5.66%. “Oil rose on Thursday to its highest since May 2015, on concern about supply risks due to unrest in Iran and another decline in U.S. inventories as refining activity hit a 12-year high. Freezing weather in the United States has spurred short-term demand, especially for heating oil. Heating oil futures were down 0.8 percent to $2.0712 a gallon; the contract hit highs not seen since February 2014 earlier in the week.”
