Investors continued to shop for stocks in 2018. Following an impressive week of accumulation in the year’s first week, investors paused briefly on the first days of last week, only to resume bidding share prices higher across a broad front on Thursday.
Our Quad-City Times Key 15 gained 47.25 to close at 2501.53 (1) and another record, helped by added strength in banking and manufacturing stocks. Among the stocks most contributing to gains in our area business barometer were FedEx, up 5.97 for the week to 271.82, and in manufacturing, Deere gaining 8.95 to 169.26, and Arconic rising another 1.22 to 30.81, with a new record high at 30.90 (1).
Tuesday’s release of the small business optimism index by the National Federation of Independent Business brought another impressive reading at 104.9. This index averaged 104.8 during the full year, the highest average for any year in the organization’s history. Since small businesses are often able to grow more quickly and are, as a group, responsible for more employee additions, this finger on the pulse of these smaller firms helps investors determine their own confidence for 2018 business conditions. Juanita Duggan, president and CEO, in released remarks, added, “With a massive tax cut this year accompanied by significant regulatory relief, we expect very strong growth, millions more jobs, and higher pay for Americans.”
From the Association of Equipment Manufacturers on Wednesday came the latest tally of farm equipment sales, so important for our Quad-Cities with widespread equipment manufacturing and suppliers here.
For all manufacturers combined, they reported December sales of large, over 100 horsepower, two-wheel drive tractors still down 7.4 percent from one year ago, but a lesser decline than seen in the year’s earlier months. Four-wheel drive tractor sales were up impressively, up 18.4 percent over the prior December, often bottoming in earlier months. Sales of combines were down a slight 3.1 percent compared to last year.
The pattern of bottoming and some tentative upturn in these categories has created some optimism among investors, optimism helped by Deere’s own release on Wednesday. Deere said that for four-wheel drive tractor sales and combine sales, its own sales pattern exceeded the improvement seen for total U.S. and Canadian sales.
And Thursday’s release from the Quad-City Area Realtor Association was a full-year summary of home sales closings for our bistate area. Closings in 2017 were up 2 percent from 5661 in 2016 to 5789. But the dollar volume of those closings was up a more impressive 7 percent from $896.6 million to $926.3 million. The average transaction was up 4 percent.
And Sharon Carlson, the group’s CEO, in released remarks noted a faster 2017 pace with average “days on market” for listings down to 51 from 56 in the prior year. A stronger home sales market here was an uplift for investors.
Arconic, with extensive and growing aluminum fabricating operations here, reported on Monday, that for its 7,900 U.S. employees, new retirement plan contributions will switch from a pension plan to a 401(k) plan. In that new plan, the company will contribute 3 percent of employee pay and will match up to 6 percent of the employee’s own contributions, offering an impressive incentive to employee savings discipline.
The change happens April 1, with a transition payment included. Vas Nair, Arconic’s executive vice president of human relations, reminded investors that the transition actually goes back to 2006, when new employees were offered only the 401(k) plan.
Cold weather takes lots of electricity. Exelon, parent of our Cordova nuclear power plants, reported Tuesday that during the recent artic deep freeze, with sub-zero temperatures, the company’s Illinois-based nuclear plants operated at near full capacity, demonstrating the need for and the reliability of that power source. Exelon shares were up last week, rising .18 to 38.37 (1).
And, First Midwest Bancorp, with Quad-City banking operations, started Friday with a message to please employees. First Midwest, too, was pleased by recent tax reform and said that in response to the expected benefits, and in consideration of company growth, the company would increase minimum pay to $15 for hourly employees. In addition, the company will award one-time bonuses of up to $1,035 to nearly 85 percent of employees, and make a $2 million contribution to the company’s charitable foundation.
The First Midwest release talked about its 35- year history and its continuing investment in colleagues, communities, and the company. First Midwest shares gained 1.77 to close the week at 26.14 (1).
Wells Fargo, on Friday morning, reported its fourth quarter results, earnings of $1.16 per share compared with $.96 per share one year ago, helped by a one-time benefit from the new tax law. Wells Fargo shares gave up .19 for the week to 62.55 (1).
A new week promises more profit reports. Will investors’ shopping continue?