Markets: The market was split again this week, with the Russell small caps and the NASDAQ lagging, the S&P 500 flat, and the DOW rising. Tech stocks continue to fall, as investors took profits.
Amazon (NASDAQ:AMZN) shocked the food world by bidding $42/share to buy out Whole Foods. Barclays (LON:BARC) now thinks that this may spark a bidding war, as retail grocery competitors place rival bids. (For more info on Whole Foods, (WFM), see the latest article on our Dividend Stocks Blog, which came out the day before the Amazon deal was announced.
This could fill an important logistics gap for the online retailer, providing hundreds of stores perfectly positioned to serve as pickup and delivery hubs for urban customers.
For more than two years, Amazon has been building out a network of urban warehouses, located in highly populated neighborhoods, and offering “Prime Now” delivery of food and sundries within a one- or two-hour delivery window. They are essentially large convenience stores, without the customers.
Adding the more-than-430 stores in Whole Foods’s network would expand Amazon’s current neighborhood network by a factor of at least five, logistics experts said Friday. Michael Knemeyer, a professor of logistics at Ohio State University’s Fisher College of Business, said:
It’s going to give them little warehouses all around the country in some of the big markets. (Source: Wall St. Journal).
Dividend Stocks Update: These high dividend stocks go ex-dividend this coming week: STX, SLRC, LVS.
Volatility: The VIX fell 3% this week, finishing at $10.38.
Currency: The dollar fell vs. most other major currencies, and rose vs. the yen and Swiss franc this week, in spite of the Fed raising rates:
Market Breadth: 16 of the Dow 30 stocks rose this week, vs. 15 last week, and 60% of the S&P 500 rose, vs. 42% last week.
Economic News: The Fed raised the Fed Funds 25 basis points, to a target of 1.00 – 1.25%, as the market had expected. It now has the task of gradually selling off its massive $4.5 trillion asset portfolio. The Empire State Mfg. hit its highest since 2014, at 19.8. Housing starts unexpectedly fell 5.5% in May., as did Building Permits.
Week Ahead Highlights: We’re in a lull for earnings action, with most Q2 reports not due out for a few weeks, but Oracle (NYSE:ORCL) and Fedex will host earnings calls next week, along with beleaguered food stock The Hain Celestial (NASDAQ:HAIN), which hasn’t posted any earnings reports since mid-2016. Brexit talks are also scheduled to begin.
Next Week’s US Economic Reports: Housing reports will be the highlight next week, with reports on Existing and New Homes are due out.
Sectors and Futures: Industrials led this week, while Tech trailed again.
WTI Crude futures fell -2.01% for the week, but ended up 1% Friday, and Natural Gas was flat this week. Here’s a look at Energy prices over the past few months:
