The markets finished the week strong, as they hit more new highs. The Dow finished up 224 points and closed at 26,616, while the NASDAQ gained 94 points and closed over 7,500. Intel was the Dow big gainer today, as it upped its stock price 10% on heavy volume. Their 2017 earnings were better than expected, and their revenue and profit projections for 2018 also beat expectations. Amazon continued to cruise along too, gaining another 24 points and topping 1,400.
The economy continues to heat up. Reports showed GDP growth of 2.6% for the fourth quarter of 2017, but “core” GDP grew by 4.6%. Home building grew by 11.7% and business investment in equipment also expanded by 11.4% in 2017. With the expected growth, we should start to see interest rates increase. A couple months back, many analysts expected two rate hikes by the Fed this year, but honorary “Westport Mafia” member, Brian Wesbury, kept saying there would most likely be at least three. Now it’s pretty much a consensus that the Fed will raise rates three times this year, and while many still believe that two increases are more likely than four, Wesbury believes that if there aren’t three rate increases, there will be four.
Meanwhile, President Trump spoke at Davos today, and his goal was to deliver two main messages: 1) America is open for business, and 2) America first does not mean America alone. President Trump said that he does not want a trade war, but he does want trade to be fairer. In light of the weakening dollar, he also expressed that he wants the dollar to strengthen again.