Something to be thankful for, indeed, was the latest week’s bidding of share prices higher by investors. Broad based gains on Monday and Tuesday provided a foundation for stock market gains despite some lightening of activity Wednesday and Friday surrounding Thanksgiving Day. For the full holiday week, our Quad-City Times Key 15 advanced 31.41 to close at 2,307.76.

Economic reports continued to provide encouragement to investors. Monday’s index of leading economic indicators released by the Conference Board showed a nice index advance, rising from 128.9 one year ago to 130.4 for October. The board notes that its index of 10 forward-looking monthly reports, including components for new consumer orders, new business equipment orders and building permits, are usually a reliable guide to future activity.

When those indicators combine to show increasing levels of activity ahead, the board gains the confidence to suggest growth in the coming months. And it did, noting, “The growth of the LEI, coupled with widespread strengths among its components, suggests that solid growth in the U.S. economy will continue through the holiday season and into the New Year.” Investors liked, “solid growth.”

On Tuesday, the National Association of Realtors told investors that existing home sales jumped sequentially from September to October, up 2 percent in just that month. No doubt, putting the disruption of September hurricanes behind us helped out. Still, the seasonally adjusted annualized pace of 5.48 million home sale closings was down by .9 percent from last October.

The realtors’ organization says a shortage of listings for sale remains a big factor. As proof, it cites that one year ago the nation had listings representing 4.4 months of inventory at the prevailing sales pace; this October, that inventory was down to only 3.9 month available. Investors regarded to the shortage of available homes for sale as yet another indicator of the future.

Factory expansion continues for Riverdale. Arconic, with growing aerospace and automotive aluminum operations right here, announced on Monday yet another investment, a $137 million furnace for heat treating longer and thicker aluminum plate. Heat treating is required in the production of certain high strength aluminum alloys. And, it is essential for large aerospace and industrial applications, according to Arconic.

The heat-treated plate can then go to the company’s new thick plate stretcher, earlier installed at Riverdale at a cost of $150 million. Arconic’s Tim Myers, president of Global Rolled Products, says that the plate is used for aircraft wing ribs, skins, and other structural components.

All this comes after Arconic’s 2014 $300 million expansion of automotive aluminum capacity here. Thankful Arconic employees watched last week as Arconic climbed .15 to 24.00 helped by those developments.

Tyson Foods says “Kansas, no. Tennessee, yes.” Just months after announcing two major chicken processing capacity additions for two plants in two states, Tyson on Monday announced plans have changed. Tyson put Kansas on hold, saying that the planned $320 million chicken processing plant for Tonganoxie, Kansas, employing 1,600 workers, would not proceed following local opposition. Tyson says it remains open to Kansas possibilities.

Also on Monday, company officials reconfirmed plans to move ahead with a $300 million chicken processing plant program for Humboldt, Tennessee, expected to employ 1,500 once operations begin in late 2019. City, county and state officials voiced support for the expansion progress announced that morning. Tyson Foods, with pork and beef processing here, saw shares advance 2.50 to 80.48 for the week.

Deere & Co.’s Wednesday morning earnings report engendered thanks as well. For the latest quarter, the fiscal fourth quarter ending October, Deere reported worldwide revenues up 23 percent to $8.02 billion. CEO Sam Allen noted, “We saw higher overall demand for our products with farm machinery sales in South America making especially strong gains and construction equipment sales rising sharply.”

Indeed, overall agriculture and turf division sales rose 22 percent. Construction and forestry sales were up 37 percent. At the bottom line, Deere reported profits up an impressive 74 percent from one year ago, up from 90 cents per share to $1.57, and beating analysts’ consensus estimates. Deere similarly raised its own forecasts for both major equipment divisions above analysts’ prior consensus estimates for 2018. Investors responded by bidding Deere shares up at the market’s opening, and up 9.86 for the full week to 145.50.

A busy week for investors begins with the holiday retailing reports from this busy Thanksgiving weekend kickoff. Shop on.

 

James Victor is senior vice president-wealth management and financial adviser with Morgan Stanley, Davenport.

The Key 15 reflects stocks of local interest. It is not a product and cannot be purchased as one. Information contained herein has been obtained by the writer from sources believed to be reliable, but he does not guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results. (1) Source: NYSE

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