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Last Week: Review -- Barron's

6 Jan 2018 11:00 am

Markets on a New Year High

The tech-heavy Nasdaq broke the 7000 barrier on Tuesday for the first time, and the Dow industrials shattered 25,000 a day later. For the week, the Standard & Poor's 500 closed at 2743.15, up 2.6%; while the Dow ended at 25,295.87, up 2.3%; and the Nasdaq finished at 7136.56, up 3.4%. Gold rallied, ending the week at $1,320, oil closed at $61.44 a barrel, and the 10-year Treasury ended at 2.48%. Bitcoin finished the week at $16,800.

Loans, Cars, M&A, and Jobs

The Wall Street Journal reported that 2017 saw the lowest growth in bank lending to companies since the financial crisis, up only 1.1%, despite solid growth and a soaring stock market. Experts described the figure as a mystery. Meanwhile, U.S. car sales fell 1.8% in 2017, the first downturn since the financial crisis. Thomson Reuters said mergers and acquisitions in 2017 hit $3.6 trillion worldwide, about the same as last year. The economy added a disappointing 148,000 jobs in December.

Congress Gears Up

Congress returned after the holiday to a Jan. 19 deadline on a funding bill to keep the government running. President Trump said Democrats won't get action on Dreamers, children illegally brought to the U.S. by their parents, unless he gets funding for the wall with Mexico. Other funding issues loom: defense, disaster relief, children's health, and opioids.

Fury Reactions

In a week of Trump tweets, a new book drew the harshest White House reaction. Unflattering statements by former adviser Steve Bannon in Michael Wolff's Fire and Fury triggered a White House statement attacking Bannon. The next day, the author, the publisher, and Bannon received cease-and-desist letters from a Trump lawyer. The administration also move to expand offshore oil drilling, rescind Obama guidelines on marijuana prosecutions, and shutter the voter fraud panel.

Bomb Cyclone Explodes

Much of the eastern U.S., already blanketed in frigid temperatures, was hit by a so-called bomb cyclone, bringing snow and ice -- followed by record-low temperatures from a polar vortex. The cyclone developed off Florida, moved up the seaboard, then exploded in the waters off Massachusetts, with hurricane-level wind gusts and coastal flooding.

Hatch Retires

The longest-serving member of the U.S. Senate, Utah's Orrin Hatch, said he was retiring after seven terms, opening the door to former Republican presidential nominee Mitt Romney. Hatch, 83, recently spearheaded the GOP tax bill as chairman of the Senate Finance Committee. He had said he would retire, but was lobbied by Trump to run again. Romney harshly criticized Trump during the campaign.

Talking in Korea

North Korean strongman Kim Jong-un opened a long-dormant hotline to South Korea, which agreed to talks on the possibility of Kim sending a team to the Winter Olympics in Pyeongchang in February. The moves run counter to U.S. policy of isolating North Korea. Kim and Trump also engaged in a Twitter taunt-fest over who had bigger nuclear buttons on their desks.

Iranian Protests

Iran was rocked by street protests triggered by rising food and gasoline prices. The government cracked down, closing down social media and arresting protesters.

He Said:

"I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!"

President Donald Trump tweeting in response to North Korea's Kim Jong-un.

The Numbers

Prices of West Texas Intermediate crude oil have been climbing after a three-year trough.

$62.01 Jan. 4, 2018, highest per barrel price in three years

$53.26 Jan. 4, 2017

$26.21 Feb. 11, 2016, three-year low

$107.26 June 20, 2014, previous peak

$145.29 July 3, 2008, historic high
 

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(END) Dow Jones Newswires

January 06, 2018 06:00 ET (11:00 GMT)

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