|Bid||241.380 x 1000|
|Ask||241.430 x 1200|
|Day's range||241.140 - 241.556|
|52-week range||205.860 - 265.930|
|PE ratio (TTM)||N/A|
|Expense ratio (net)||0.15%|
The S&P 500 started this week on a mixed note and declined as the week progressed. After declining to two-week low price levels on Tuesday, the S&P 500 started April 25 on a weaker note. However, the S&P 500 (SPY) regained strength as the day progressed and closed the day with small gains.
3M (MMM) announced its 1Q18 earnings on April 24, 2018. It reported adjusted EPS (earnings per share) of $2.50, an increase of 15.7% on a year-over-year basis. In 1Q17, 3M posted adjusted EPS of $2.16. 3M was able to meet the Wall Street estimate of $2.50 to $2.51. The adjusted earnings per share exclude a net tax expense of $217 million, or $0.36 per share, resulting from the Tax Cuts and Jobs Act. It also excludes a lawsuit settlement with the State of Minnesota for $897 million, which translates into $1.16 per share.
In the previous article, we noted that Sheila Patel, the CEO of Goldman Sachs (GS) Asset Management’s International division, believed that a global meltdown in equities isn’t imminent. As market risks are increasing in the economy, she advised investors to focus on a variety of investment strategies.
Cleveland-Cliffs (CLF) reported its 1Q18 results on April 20. It held its conference call with securities analysts and institutional investors the same day to discuss the results.
Freeport-McMoRan (FCX) released its 1Q18 results yesterday. The company’s adjusted EPS (earnings per share) from continuing operations were $0.46 in 1Q18, compared with $0.13 in 1Q17.
Metal and mining stocks, including Alcoa (AA), have whipsawed amid frequent policy changes. Meanwhile, despite Section 232 tariffs, US steel stocks have been subdued this year. Steel stocks’ price action could be attributed to two key factors.
The US Government today signaled it may give the world’s second largest Aluminum producer, Rusal, a break on aluminum sanctions. Alcoa has dropped almost 12% in response to the action. The problem with a fickle government without a real cohesive strategy is whippy returns. Who know what will happen next? Support for Alcoa could be at the $49 level. The stock recently peaked over $60 on the sanctions and a decent 2018 outlook. Take a look at our Alcoa post-earnings report here from last week.
BlackRock’s (BLK) Larry Fink also shared his views on the bull market in his recent interview with CNBC. He believes in staying invested in the equity market.
Between April 12 and April 19, 2018, US equity indexes’ correlations with US crude oil June futures were as follows: the S&P 500 Index (SPY) at -23.9% the S&P Mid-Cap 400 Index (IVOO) at -25.5% the Dow Jones Industrial Average Index (DIA) at -45.7%
On Thursday, April 12, 2018, Larry Fink, the chair and CEO of BlackRock (BLK), shared his view on market movement and volatility in an interview with CNBC.
Following a strong performance last week, the S&P 500 started this week with strong sentiment and advanced in the first three trading days. However, the S&P 500 opened lower on April 19 and declined as the day progressed. Nine out of 11 major S&P 500 sectors declined on Thursday. Weakness in the consumer staples, real estate, and IT sectors weighed on the market. Strength in the financials sector limited the market losses.
3M (MMM), a diversified technology company, is expected to report record first quarter revenues in 1Q18. 3M is projected to report 1Q18 revenues of ~$8.25 billion, which represents 7.3% growth on a year-over-year basis.
In the previous part of this series, we saw that Morgan Stanley (MS) thinks the bull market will end soon. It said the present bull market has already priced in the market movement and there is nothing else that will strengthen it. The most important factor investors should watch in the present scenario is earnings growth, which plays a major role in market movement.
On Tuesday, April 17, 2018, leading investment firm Morgan Stanley (MS) shared its views on the bull market in a research report. According to the report, the positive impact of the fiscal policy has already been priced into the market movement and won’t add more value to any future movement. The bull market has been mainly driven by the expectation of a huge tax reform and improved government spending.
Billionaire investor Ray Dalio believes that the present economic condition in the US is similar to conditions in the mid-to-late 1930s.
Metal and mining stocks saw a sharp rally yesterday. Looking at individual names, Alcoa (AA) and Freeport-McMoRan (FCX) gained 4.0% and 4.8%, respectively. In the steel space, U.S. Steel Corporation (X) and AK Steel (AKS) gained 3.1% and 2.3%, respectively. Notably, the stocks saw a significant increase in an otherwise range-bound market. The SPDR Dow Jones Industrial Average ETF (DIA) closed with a marginal loss of 0.17% on April 18. Steel stocks also defied a downgrade by UBS.
After regaining strength last week, the S&P 500 started this week on a stronger note and gained in the first two trading days. Carrying forward the strength, the S&P 500 opened higher on April 18 and closed the day at four-week high price levels. Five out of 11 major S&P 500 sectors closed higher on Wednesday. Strength in the energy and industrials sectors pushed the market higher. On the other hand, weakness in the consumer staples and telecom services sectors limited the market gains.
Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, recently shared his views on the current trade war talk and the rising concern about other geopolitical tensions in a LinkedIn blog post. Ray Dalio said, “Donald Trump threatening to raise the stakes by $100 billion and the Chinese promptly indicating that they will match the moves dollar for dollar and step by step took me and people closer than me to the negotiations by surprise.
Aluminum prices have seen volatile action so far this year. The lightweight metal started the year on a positive note but has traded largely sideways. President Trump fired the first major salvo of the year by imposing a 10.0% tariff on aluminum and a 25.0% tariff on steel imports.
According to data provided by the United States Census Bureau, US retail sales rose 0.6% in March as compared to a fall of 0.1% in February 2018. The rise met the market expectations of a 0.4% rise. The retail sales improved for the first time in March 2018 after three consecutive falls.
Last week saw the release of US inflation and US retail sales data. These two metrics are important indicators of the health of the US economy. Many policymakers and market participants use these indicators to analyze consumer behavior.
The mixed market sentiment and optimism about earnings season helped the S&P 500 regain strength last week. With the improved sentiment, the S&P 500 started this week on a stable note by closing higher on Monday. All 11 major S&P 500 sectors closed higher on April 16.