Stocks finished what could have been the busiest week for news in recent history. At the close the Dow was off 7 points to 20,093 on light volume. For the week the Dow finished up 1.3%. Investor’s Business Daily currently has markets in rally mode saying the depth and breadth of the market is very good. They caution however that falling fear levels could signal complacency.
The commerce Dept. issued initial Q4 GDP estimates on Friday and the reading was a “soft” 1.9% growth rate which came in below estimates calling for a 2.2% growth rate. Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd., stated in a research note not to be “deceived by the softish headline” and that the domestic economy has real momentum heading into 2017. Within the report it was revealed that consumer spending was ok and business investment picked up markedly. These two positive readings were offset by a widening trade deficit which may have been caused by weather related delays of agriculture exports.
Microsoft reported stellar earnings sending shares to a new high. Revenue was up 1% while earnings grew 9%. The important driver within the report was the growth in cloud computing. Office 365 revenues increased 50% while cloud Azure revenue grew 93% yoy. Amazon and Microsoft, both based in rainy Seattle, are clear winners in the trend of “cloud” computing.
Oil prices were off a bit with WTI crude trading down 1.2% at $53.12 per barrel. Oil was lower due to the prospects of rising US production offsetting OPEC production cuts.