Markets began the 2018 year with a “FANG!” as the FANG and material stocks bolted higher. At the close the Dow was up 104 points to 24,824. Trading volume surged as traders got back to work from the Christmas/New Year’s break.
The final market numbers are in and the S&P 500 Index gained 19.4% in 2017. Sectors that led the way included home builders, mortgage lenders and do it yourself brokerage firms. While home builder stocks faded toward the end of the year the materials sector had a strong December and looks poised to continue to run because global manufacturing strength is evident and the gurus are predicting a 4% growth rate in 2018. Another interesting tidbit is that talk of raw material shortages are being heard in Europe, Asia and the US. Read the Bloomberg article here on our Facebook page.
Energy prices have hit levels not seen since mid-2015. WTI crude oil is over $60 per barrel as improving demand coupled with supply constraints have boosted prices. Natural gas prices were up 3% and are back over $3 per million BTUs mark thanks to temperatures in the Midwest that are being described as “colder than a quale in the Klondike”. Oil prices benefited from a North Sea pipeline repair shutdown as well as sudden protests in Iran which might threaten oil supplies in the region. The Iranian protests were sparked by a 40% increase in the price of eggs which morphed into general discontent over how the government is running the show. The leaders of Iran, in harkening to the old saying of “my kingdom for a horse” might now be saying “my kingdom for a reasonably priced egg”.