On The Fly: Stocks end week mixed as Trump rally loses steam, oil surges
The major averages ended the week mixed, with only the Dow Jones Industrial Averages notching a small gain, as the post-election "Trump rally" seems to be losing its steam. It appears more certain that the Federal Reserve will raise interest rates later this month after the unemployment rate dropped to a more than nine-year low of 4.6%. MACRO NEWS: In the U.S., third quarter GDP growth was upwardly revised to a 3.2% annual rate. Consumer confidence surged 6.3 points to 107.1 in November. According to data compiled by Adobe Digital Insights, shoppers spent $3.45B on Cyber Monday, marking the largest online sales day in U.S. history. The pending home sales index rose 0.1% to 110.0 in October. The Fed's Beige Book for November stated that the economy expanded at a modest to moderate pace in most regions from early October through mid-November. Markit's manufacturing PMI rose to 54.1 in the final November print. ISM's manufacturing index rose 1.3 points to 53.2 in November. Construction spending rose 0.5% in October. Nonfarm payrolls rose 178,000 in November. The unemployment rate dropped to 4.6% from 4.9%... President-elect Donald Trump announced he is establishing the President's Strategic and Policy Forum, which will be called upon to meet with the President frequently to share their specific experience and knowledge. The Forum will be chaired by Blackstone (BX) CEO Stephen Schwarzman and will include members such as General Motors (GM) CEO Marry Barra, JPMorgan (JPM) CEO Jamie Dimon, BlackRock (BLK) CEO Larry Fink, Disney (DIS) CEO Bob Iger, Wal-Mart (WMT) CEO Doug McMillon, and IBM (IBM) CEO Ginni Rometty... In Asia, China's industrial profits rose 9.8% in October. Japan's unemployment rate came in at 3% in October. Japan's retail sales fell 0.1% from a year before. China's official manufacturing PMI climbed to 51.7 in November, while non-manufacturing PMI climbed to 54.7... In Europe, German consumer prices rose 0.1% in November. The Eurozone PMI manufacturing index was confirmed at 53.7. Unemployment in the euro zone dropped to 9.8%... Additionally, the OPEC cartel reported an agreement, to take effect in January, to cut 1.2 million barrels a day from its present output, which will leave OPEC output at 32.5 million barrels a day. WTI crude prices surged in the wake of the deal, finishing the week trading above $51 per barrel. COMPANY NEWS: Black Friday weekend discounts helped boost U.S. auto sales for the month of November, with Ford (F) reporting that sales increased 5% and General Motors (GM) saying sales were up 10.2% last month compared to November of last year. Fiat Chrysler (FCAU), Nissan Motor (NSANY), Toyota (TM) and Volkswagen (VLKAY) also announced increases in their auto sales in the U.S.... Starbucks (SBUX) announced that CEO Howard Schultz is stepping down and will be appointed executive chairman, shifting his focus to design and development of Starbucks Reserve Roasteries around the world. Kevin Johnson, president and chief operating officer and a 7-year member of the Starbucks board of directors, will assume the role and responsibilities of president and CEO, effective April 3, 2017... UnitedHealth Group (UNH) backed its fiscal 2016 guidance and provided better than expected guidance for fiscal 2017, sending shares higher... Caterpillar (CAT) called the Thomson First Call consensus for 2017 of $3.25 earnings per share on $38B of sales and revenues "too optimistic considering expected headwinds". However, the heavy machinery maker added that it is "encouraged" by the potential of a U.S. infrastructure bill, tax reform, commodity prices and the recent OPEC announcement... Elliott Management, which owns more than 4% of the common stock and equivalents of Cognizant Technology Solutions (CTSH), made public a "value-enhancement plan" that it contends can help the company achieve a value of $80-$90 per share or more by the end of 2017... AT&T (T) unveiled its new over-the-top offering DIRECTV NOW, which has four tiers of channel packages: $35 per month for 60+ channels, $50 for 80+ channels, $60 for 100+ channels, and $70 for 120+ channels. Time Warner's (TWX) HBO and Cinemax can be added for $5 per month. AT&T also said that it will offer an Apple (AAPL) TV to customers who sign up for a 3-month pre-paid package, and an Amazon (AMZN) Fire TV stick included with 1 month pre-paid DIRECTV NOW package... GoPro (GPRO) said it would cut about 15% of its workforce and close its entertainment division amid a continued sales decline. At the same time, GoPro said it experienced "solid" holiday demand in the U.S. for its HERO5 action camera... In M&A news, The Wall Street Journal reported that talks to sell Valeant Pharmaceuticals' (VRX) Salix unit to Japan's Takeda Pharmaceutical (TKPYY) for roughly $10B have broken down over price disagreements and other matters. The former CEO of Warner Music Group, Edgar Bronfman Jr., recently submitted a bid to buy Time Inc. (TIME) for $18 a share, which the company's board is said to have rejected, according to The New York Post. Linde (LNEGY) confirmed news reports that Praxair (PX) has approached the company in an effort to restart talks over a potential tie-up. Parker Hannifin (PH) agreed to purchase all of the outstanding shares of Clarcor (CLC) for $83 per share in cash... Among companies that announced quarterly results this week, Tiffany & Co. (TIF), Thor Industries (THO), Splunk (SPLK), Ascena Retail (ASNA), and Five Below (FIVE) advanced following their reports, while Mallinckrodt (MNK), American Eagle Outfitters (AEO), Autodesk (ADSK), Dollar General (DG), Express (EXPR), Guess (GES), Workday (WDAY), Ulta Beauty (ULTA), Ambarella (AMBA), and Smith & Wesson (SWHC) declined. INDEXES: For the week, the Dow rose 0.1% to 19,170.42, the Nasdaq lost 2.66% to 5,255.65, and the S&P 500 dropped 0.96% to 2,191.95.