US Stock Market Overview – Stocks Decline, Led by Energy, The Nasdaq Rises 4.5% for Novemberthe VIX rallies for the week
US stocks moved lower on Friday, as investors took profits following a robust November, which was capped off by Black Friday. All sectors were lower, led down by Energy, Utilities were the best performing sector in a bad tape. For the week the S&P 500 index was up by 1% but the VIX volatility index was also up, rising more than 2.4%. Returns during November were robust. The large cap S&P 500 index rose 3.4% while the Nasdaq composite climbed 4.5%.
Black Friday Arrives
Shoppers took advantage of huge markdown and rung up 4.2 billion worth of purchases online on Thanksgiving Day, a 14.5% increase according to a story run by CNBC. Expectations were for sales of 4.4-billion. The National Retail Federation is calling for total holiday retail sales to grow between 3.8% and 4.2%, which would be much better than more meager growth of 2.1% in 2018. Black Friday online sales are on track to hit $7.4 billion a 19.2% increase from last year.
Nearly half the revenue on Thanksgiving Day came from smartphones, a 24.4% increase from last year. While e-commerce giants saw a 244% increase in sales, smaller retailers saw a 61% jump. Black Friday is expected to be the biggest shopping day for U.S. shoppers, according to the National Retail Federation.
Berkshire Misses on Tech Data
Tech Data announced that it would be purchase by Apollo for $145 per share. What is interesting about the story is that Berkshire Hathaway lost out to Apollo, as it attempted to use some of its stockpile of cash. Berkshire played the role of the second opinion. After Apollo bid on Tech Data, Bank of America contacted Berkshire and told them they had a shopping clause in their contract with Tech Data and asked for a competing bid. Berkshire came in with a bid of $140 per share, increasing Apollo’s bid from $130 per share to $145 per share. Berkshire did not counter, and continues to look for a place to generate returns with its huge pile of cash.
Inflation in Europe Slips
The EU reported its preliminary estimate for November CPI which climbed more than anticipated. The headline rate increase by 1.0% year-over-year which compares with 0.7% in October and expectations for a 0.9% pace. The core rate rose to 1.3% from 1.1%, which was also more expected.