The stock markets in the United States fluctuated and eventually ended the trading session with mixed results. The Dow Jones and NASDAQ slightly gained while the S&P 500 and Russell 2000 dropped today.
The decline of equities in the energy sector offset the gains of the shares of Wal-Mart Stores and Home Depot—both reported solid quarterly earnings.
Warren Buffett’s Annual Letter: Mistakes, Buybacks and Apple
Warren Buffett published his annual letter to shareholders over the weekend. The annual update, which has become one of the largest events in the calendar for value investors, provided Buffett's views on one of the most turbulent and extraordinary years for the financial markets in recent memory. Q4 2020 hedge fund letters, conferences and more Read More
In an interview with Bloomberg, Alan Gayle, a senior strategist at RidgeWorth Investments, commented, “We’re coming off of a strong day yesterday. The fact that the market is catching its breath and waffling around flat is an encouraging sign. There’s a never-ending swirl of geopolitical angst that tends to take center stage, but the big macro event that the market is focusing on is the December FOMC meeting.”
The Federal Reserve reported that the manufacturing index increased 0.04% in October. Bloomberg estimated a 0.2% expansion in manufacturing for the month of October. The industrial production surprisingly declined 0.2% last month. The Fed estimated that the total industrial production increased at an annual rate of 2.6%.
Sam Coffin, an economist at UBS Securities, told Bloomberg, the data showed “pretty broad strength in manufacturing.” He added, “It’s too early to declare the inventory correction over, but it certainly hints there’s less of a drag at the start of Q4 than at the start of Q3.”
The Department of Labor reported that the Consumer Price Index (CPI) climbed 0.2% on a seasonally adjusted basis in October. The agency reported that the indexes for all items except food and energy increased 0.2%. The food index and energy index rose 0.1% and 0.3%, respectively.
Stephen Stanley, chief economist at Amherst Pierpont Securities, commented that the core consumer index was “pretty solid.” According to him, “It does feel core inflation has firmed up a little bit this year, and I would imagine it’d continue to do so as the economy continues to take up the slack.”
Policymakers repeatedly emphasized that they want to see and ensure that the inflation rate is in a stable direction towards meeting their 2% target before raising interest rates.
- Dow Jones Industrial Average (DJIA) – 17, 489.50 (+0.04%)
- S&P 500- 2,050.44 (-0.13%)
- NASDAQ- 4,986.02 (+0.03%)
- Russell 2000- 1,554.45 (-0.14%)
- EURO STOXX 50 Price EUR- 3,451.94 (+2.67%)
- FTSE 100 Index- 6,268.76 (+1.99%)
- Deutsche Borse AG German Stock Index DAX- 10,971.04 (+2.41%)
- Nikkei 225- 19,630.63 (+1.22%)
- Hong Kong Hang Seng Index- 22,264.25 (+1.15%)
- Shanghai Shenzhen CSI 300 Index- 3,758.39 (-0.15%)
Stocks in Focus
The stock price of Airgas surged more than 29% to $137.35 per share. The company agreed to be acquired by Air Liquide for $143 per share in cash. Airgas also reported quarterly earnings of $1.31 per share, higher than the $1.29 per share expected by analysts.
Nuance Communications gained more than 18% to $20.21 per share. The company reported earnings of $0.41 per share, better than the $0.35 per share expected by analysts for the fourth quarter.
Keurig Green Mountain declined almost 10% to $40.13 per share. Stifel Financial analysts Mark Astrachan reduced his sales forecast for the company due to lower K-cup volumes, lower prices in coffee brewers and weak demand for the new Kold soda maker. He is now expecting Keurig sales to decline 7.8% in 2016 and 7.2% in 2017. His previously estimated a 2.1% sales decline next year and 5.4% sales drop in 2017.