After a bang-up year, the Street’s last market day for 2017 finished on a whimper as stocks closed lower on thin volume. The Dow fell -0.39%, S&P 500 slid -0.48% and NASDAQ dropped -0.67%. Market focus has shifted to what companies will do with their tax savings in 2018.
Leading the blue-chip index was Coca-Cola up +0.48% and General Electric up +0.75%. On the S&P 500, gainers were Signet Jewelers up +1.07% and NRG Energy up +1.68%. Dragging on the index was Under Armour Class A down -6.93% and Under Armour Class C down -5.80%. A weaker dollar drives the price of gold above $1,300 per ounce. International brent crude rose +0.71% to $66 a barrel.
- Dow 24,741.49 -0.39%
- S&P 500 2,674.98 -0.48%
- NASDAQ 6,903.39 -0.67%
- Russell 2000 1,540.33 -0.56%
- NYSE Composite 12,840.77 -0.10%
- Gold 1,305.07 +0.66%
- Oil WTI $60.16 +0.56%
- 10-Year Treasury 2.411 +0.21%
By any measure, the markets have had another ebullient performance this year with a number of barriers breached as the Dow cruises towards 25,000. NASDAQ also briefly went beyond 7,000 for the first time on 18 December and has a one-year return of 25%.
As President Trump reminds us through his regular short-hand communications on Twitter it's had 70 record closes this year helped in part by the tax reform bill recently passed by Congress.
The market has had a nine-year rally and investors have an optimistic outlook for 2018 with corporate earnings expected to gain from the bounty of Trump's self-described 'big, beautiful' tax cuts.
70 Record Closes for the Dow so far this year! We have NEVER had 70 Dow Records in a one year period. Wow!— Donald J. Trump (@realDonaldTrump) December 18, 2017
Goldman takes a hit from 'big beautiful' tax cut
Goldman Sachs announced today that it would take a one-time charge to its profits of around $5bn as a result of the tax reform law. Much of the charge stems from a tax on earnings overseas and a write down on US deferred assets writes Bloomberg.
It's a charge that other banks face with Citigroup citing up to $20bn. In spite of the charges from the tax bill, tax reform is still seen as a boon to banks by market analysts as companies bring their cash home from overseas and potentially increasing deal flow.
Trump takes a dig at Amazon
Trump's early morning tweet took a swing at the US Postal Service (USPS) and at Amazon which rattled the stock falling -1.40% on Friday.
Trump's tweet may stir up anti-Amazon sentiments as he questioned in under 250 characters why the Post Office which he said was losing billions of dollars was charging "Amazon and others so little to deliver their packages."
It was he argued "making Amazon richer and the Post Office dumber and poorer." USPS posted a net loss of $2.1bn for its fiscal year.
Trump may be referring to a deal between the postal service and other e-commerce retailers that provides the last leg of the journey from shipping hubs to the final destination at around half the price they would pay to delivery services FedEx or UPS.
How much weight this latest tweet tirade will carry remains to be seen. Trump has had a continuing campaign against both Amazon and the Washington Post owned by Amazon's founder Jeff Bezos.