Geopolitical tensions kept a tight rein on stocks as the Dow closed out with a small gain of just under 2 points to 20,658. Trading volume was lighter. Stocks are awaiting the rush of earnings reports that begin this week.
Morgan Stanley has a new chief US strategist named Michael Wilson. (I wonder if he is related to Russel Wilson). Michael put out his first major market call today and it is a stunner. He feels US equity values could rise in the coming year based on an upturn in the global business cycle with the possibility of a US tax cut turbocharging things as well. He is likening it to the period prior to the dot.com bubble and thinks that markets could rise by 15% as a base case and 30% as a top line bull case. After the run however he is suggesting investors get defensive as this will mark the final rally before a pullback. While Michael could be way off the mark his comments are interesting given recent reports of labor shortages, housing shortages and rising prices for materials suggesting rising GDP growth.
Swift Transport and Knight Transportation announced a merger deal valued near $5 billion sending shares of both companies higher. Trucking companies are under the gun as a driver shortage is about to lead to a rise in rates and wages. It used to be that you could get a CDL in a Cracker Jack box but now days it takes thousands of dollars culminating in the rubber glove treatment to get one.
Oil continued to move higher thanks to Libya supply disruptions and the Syrian situation. WTI crude gained 1.5% to $53 per barrel.