On The Fly: Stocks end week at record highs ahead of Fed meeting
The Dow, the Nasdaq and the S&P all finished higher in every day of this week, which was a feat the three major averages had not accomplished in five years. The indexes all finished the week at fresh all-time records as the post-election "Trump rally" regained momentum ahead of the Federal Reserve meeting next week. MACRO NEWS: In the U.S., Markit's services PMI dipped to 54.6 in the final November print. The ISM non-manufacturing index rose 2.4 points to 57.2 in November. The Labor Market Conditions Index rose 1.5 points in November. The international trade deficit widened in October to $42.6B. Third quarter productivity growth remained estimated at a 3.1% rate. Factory orders climbed 2.7% in October. The JOLTS report indicated that job openings fell 97,000 to 5.53M in October. Initial jobless claims fell 10,000 to 258,000 in the week ended December 3. December consumer sentiment surged 4.2 points to 98.0 in preliminary print from the University of Michigan survey. Wholesale sales rose 1.4% in October, while inventories fell 0.4%... In Europe, the European Central Bank announced a continuation of its asset-buying program, although a reduced pace of purchases is set to start from April next year. Benchmark interest rates were left unchanged, as expected. The PMI for the Eurozone's manufacturers and service providers rose to 53.9 in November. Eurozone retail sales grew by 1.1% in October. GDP for the Eurozone grew 0.3% on a quarterly basis. In Italy, 60% of Italians voted against the constitutional reforms promoted by Prime Minister Matteo Renzi to scrap the Senate of many of its legislative powers and modernize the country's institutional framework... In Asia, in a surprise move, the Reserve Bank of India left rates unchanged at its meeting. The RBI was expected to cut rates at least 25bp, and potentially 50bp. Japan cut its reading of third quarter economic growth to an annualized 1.3%. China's total FX reserves fell to $3.051T in November. Chinese trade data for November showed that exports rose 0.1%, while imports rose 6.7%. China's producer prices rose 3.3% in November, while consumer inflation picked up more than expected to 2.3% from a year earlier. COMPANY NEWS: Time magazine announced that Donald Trump has been named its Person of the Year for 2016. Speaking with the publication, the President-elect talked about the drug industry, suggesting that some stock analysts may have misinterpreted his intentions and vowed that he is "going to bring down drug prices." Johnson & Johnson (JNJ), Merck (MRK), Eli Lilly (LLY), Novartis (NVS), Pfizer (PFE), Celgene (CELG), Biogen (BIIB) and Amgen (AMGN) were among the stocks trading lower following the release of Time's interview... Boeing (BA) made headlines after Donald Trump tweeted that the latest Air Force One order should be canceled. Speaking briefly at Trump tower, the President-elect cited the high costs of converting the Boeing jumbo jet for presidential use as the reason for a possible deal cancelation. The President-elect also met with SoftBank (SFTBF) CEO and Sprint (S) chairman Masayoshi Son at Trump Tower. Following the visit, Trump said in a tweet that Masayoshi has agreed to invest $50B in the U.S. and create 50,000 new jobs. Speaking in a Wall Street Journal interview after, the SoftBank CEO said that the pledge of a $50B U.S. investment will come from his company's previously-announced $100B tech investment fund. Son noted that he likes Trump "very much," and declined to comment on his current interest in T-Mobile (TMUS), the report noted... Amazon (AMZN) announced Amazon Go, a new kind of store with no registers and no checkout required. In the test store format, which will open to the public in early 2017, shoppers scan as they go with their Amazon Go app, shop as normal, and leave the store with the items billed to their Amazon.com account... The Coca-Cola Company (KO) announced that its CEO Muhtar Kent will step down in May 2017 and will be succeeded by James Quincey, the company's president and COO... Under Armour (UA) and Major League Baseball announced a 10-year partnership that names the athleticwear maker as the official uniform provider to MLB... In M&A news, Verizon (VZ) announced a deal to sell a portfolio of 24 data center sites and their operations to Equinix (EQIX) for $3.6B in cash. Consolidated Communications (CNSL) agreed to acquire FairPoint Communications (FRP) in an all-stock merger transaction valued at approximately $1.5B, including debt. Roper Technologies (ROP) announced that it has entered into a definitive agreement to acquire Deltek from private equity firm Thoma Bravo in an all cash transaction valued at $2.8B. Synchronoss Technologies (SNCR) entered into a definitive agreement to acquire Intralinks Holdings (IL) for approximately $821M in equity value. Additionally, Synchronoss announced an agreement to divest a portion of its activation business to Sequential Technology International. Abbott (ABT) announced that it has filed a complaint to terminate its proposed acquisition of Alere (ALR) based on the substantial loss in the latter's value since the time of their merger agreement. The Independent Directors of Sky plc (SKYAY) announced that the company has received an approach from 21st Century Fox (FOX, FOXA), agreeing on an offer price of GBP10.75 per share in cash. Stillwater Mining (SWC) agreed to be acquired by Sibanye Gold (SBGL) for $18 per share in cash, representing an aggregate enterprise value of $2.2B... Among companies that announced quarterly results this week, Bob Evans Farms (BOBE), Francesca's (FRAN), Dave & Buster's (PLAY), lululemon (LULU), Tailored Brands (TLRD), Costco (COST), and Broadcom (AVGO) advanced following their reports, while Michaels (MIK), Vera Bradley (VRA), Oxford Industries (OXM), Sears Holdings (SHLD), and H&R Block (HRB), declined. INDEXES: For the week, the Dow rose 3.06% to 19,756.85, the Nasdaq advanced 3.58% to 5,444.50, and the S&P 500 gained 3.08% to 2,259.53.