Happy First Friday of 2018!
The market continues its upward hike as the Dow Jones Industrial Average (DJI) hit a record high of 25,000 this week. Amidst one of the longest bull markets on record, the Dow rose 25% last year, the S&P 19%, and the Nasdaq 28%, mostly due to strong gains in tech stocks. But the question remains…
President Trump’s top economic advisor, Gary Cohn, said that stocks are cheap right now which could bode well for investors, considering Cohn spent 11 years at Goldman Sachs (GS) before advising the President. Cohn believes that the recently passed Republican tax reform plan will help boost the stock market significantly. A positive economic outlook coupled with a fresh corporate tax cut will likely sustain favorable market conditions for investors. Retail is poised to benefit greatly from the tax cut. Barclay’s upgraded its rating for both Target (TGT) and Lowe’s (LOW). Both stocks are up this morning, which is to be expected.
But it’s not all sunshine for retail…
Two of America’s largest department store chains, Macy’s (M) and Sears (SHLD), announced they will be closing over 100 stores nationwide. Brick and mortar retailers, especially department stores, have been bogged down by excessive real estate costs and shifting consumer preferences. More shoppers are choosing to bypass department stores as brands market directly to consumers and e-commerce giants like Amazon (AMZN) inevitably continue to eat away market share.
Shares of Deutsche Bank (DB) fell 5% today after it announced it will post a small net loss this year, citing lackluster client activity, weak trading, and a $1.8 billion negative impact resulting from the US tax reform plan. The tax plan will require Deutsche Bank to revise its valuation of certain deferred tax assets, shrinking fourth-quarter earnings. Germany’s largest bank has struggled to keep revenue up, seeing it fall by nearly 10% in the third quarter.
In yet another spectacular week for cryptocurrencies, Ethereum briefly surged through the $1000 mark to an all-time high of $1075.39. Meanwhile, Bitcoin, the world’s largest cryptocurrency by market cap, leapt back over $16,000 after hovering around $13,000 earlier this week.
Ripple, the newest crypto to steal the limelight, recently became the world’s second largest cryptocurrency by market cap after passing up Ethereum. Three of the world’s largest money transfer companies announced they will be utilizing Ripple’s XRP token on their platforms. Ripple has recently garnered a lot of attention amongst crypto traders after announcements that it will soon become available on CoinBase, one of the most popular cryptocurrency exchanges. This rollout will likely cause the token to further increase in value. Ripple is up 52.9% this week.