U.S. stocks finished higher on Friday to close out one of the best weeks since February. Investors took in a consumer price index report that showed inflation rose in November by the most since 1982, although just below the feared mark of 7%. Investors are also digesting what is expected to be a more hawkish tone from the Federal Reserve’s monetary-policy committee next week at its meeting. For the week, the Dow was up 4%, the S&P 500 Index gained 3.8% and the Nasdaq rose 3.6%. The Dow recorded its biggest weekly percentage gain since March, while the S&P 500 Index and Nasdaq each had their largest weekly percentage gains since February.
Top sectors last week:
- S&P 500 Information technology sector up 5.98% (ETF: XLK)
- S&P 500 Energy sector up 3.69% (ETF: XLE)
- S&P 500 Consumer staples sector up 3.54% (ETF: XLP)
Top news last week:
- Ford chairman acquires 2 million shares of automaker: Ford Motor Co. Chair Bill Ford acquired almost 2 million shares of his company for about $20.5 million through the exercise of stock options. The automaker’s shares hit a 20-year high last month, with investors rewarding the company for a more aggressive push into electric vehicles under Chief Executive Officer Jim Farley. Since Farley became CEO 14 months ago, Ford shares have risen nearly 200%, closing Friday at $21.45. “The decision to exercise these options to purchase almost 2 million shares of common stock reflects Bill’s confidence in the future of the company and our plan to create tremendous value for all of our stakeholders,” Ford Motor said in an emailed statement.
- Intel is taking Mobileye unit public: The Wall Street Journal reported on December 7 that Intel Corporation (INTC) is planning to take its self-driving car unit Mobileye public by the middle of the next year, and Intel’s stock jumped 8% when the news was released. Intel, one of the leading chip manufacturers in the world, acquired Mobileye in 2017 for $15.3 billion to expand its business into self-driving technology and according to people familiar with the matter they might be aiming for $50 billion valuation during the IPO. The IPO of Mobileye is Intel’s attempt to expand into new markets, and to develop chip facilities with the money raised from the IPO. The company aims to invest $44 billion to build new facilities in Arizona, New Mexico, Oregon, Costa Rica, Israel, and Ireland. The company is likely to deploy the funds raised through Mobileye’s IPO to fund these projects.
- Apple’s market cap is heading to $3 trillion: Apple shares have been on a ferocious tear, up almost 39% year to date, leaving it less than 3% away from a $3 trillion market capitalization, a milestone never hit by any other public company. The rally includes an astonishing 20% rise in just the past four weeks, a period in which the S&P 500 has improved less than 1%. However, despite this quick growth it seems like AAPL stock still has room to grow. Apple is a top stock pick for Morgan Stanley in 2022. “The combination of a strong, loyal customer base and the upcoming launch of AR/VR products positions AAPL for a re-rating in 2022,” analyst Katy Huberty wrote in a note Thursday. Morgan Stanley’s 12 month price target for Apple is $200, giving AAPL almost 12% upside growth potential.
Calendar:
The Federal Reserve meeting sits front and center with market watchers this week with Chairman Jerome Powell already hinted at a Congressional hearing that it might be appropriate to speed up the pace of tapering asset purchases. Traders will be closely watching Fed’s announcements on interest rate hikes for 2022 and 2023, as well as looking for how Omicron risk factors into the rate and tapering equations. Other economic calendar, events to watch next week include reports on producer price inflation, retail sales and industrial production.
Earnings:
Wednesday, December 15: REV Group (REV) and Lennar (LEN).
Thursday, December 16: Accenture (ACN), Adobe (ADBE), Carnival (CCL), JAbil (JBL), Expensify (EXFY), Rivian Automotive (RIVN) and FedEx (FDX).
Friday, December 17: Darden Restaurants (DRI) and Winnebago (WGO).
For more watch video in GEO
