Hello and welcome back. Last week we mentioned the two days around Thanksgiving since the 1940s typically had a 70% chance of a positive gain, with an average return of 0.3%. It was sort of spooky how that almost happened to the exact decimal point. Anyhow, we began the month of December in this spectacular year with some minor give back as the S&P 500 fell 0.27% and the NASDAQ 0.36%. Retail stocks were hit some as initial reports were of reduced sales year over year post Thanksgiving but these initial reports usually tend to be spotty. The market has been up eight weeks in a row which is very rare. It is due for some sort of breather.
The National Retail Federation estimated that retail sales fell by 2.7 percent during the full Thanksgiving weekend to $57.4 billion.
Also in economic news was the widely followed ISM Manufacturing report:
The Institute of Supply Management's survey index showed manufacturing rose to 57.3 last month from 56.4 in October. Analysts had expected the index to drop to 55.0. Readings above 50 illustrate expansion.
The NASDAQ late last week hit the top of this channel it has been in all year. So far, true to form, it has pulled back - although only slightly.
Gold also had a very rough session as this commodity has been in a bear market almost the entire year.
Financials continue to have a leadership role in this market - we have been noting quite a few the past few weeks. Today we present the chart of Blackstone (BX) which is a private equity firm.
Morgan Stanley downgraded conglomerate 3M (MMM) which weighed on the Dow. You can see from the chart this has been a quite amazing run for a relatively boring business; no closes below the 10 day moving average. Despite describing 3M as a great company, analyst Nigel Coe warned that 3M shares could lag peers following a period of strong performance. "We see a combination of EPS underperformance and multiple compression through 2014, assuming better macro," he said in a note, adding that there is a downside to the stock's price target of $122.
Did you catch the 60 Minutes piece on Amazon.com and its drone army it wants to unleash in half a decade?
In the not-too-distant future, Amazon deliveries could come by air directly to your doorstep. The online mega-retailer unveiled plans on Sunday for a new delivery service called Prime Air, which uses unmanned aerial vehicles -- or drones -- that look like mini helicopters. The "octocopters" aren't ready to take flight yet. Amazon CEO Jeff Bezos said in an interview on 60 Minutes that the drones would be ready to take flight in four to five years. But an Amazon spokesperson pointed to an updated post on the company's website promising aerial deliveries as soon as federal rules change.
Original post: STTG Market Recap December 2, 2013