US equity markets rounded out a strong quarter with a whimper last Friday (28 September) - Dow edged +18-points or +0.07% higher Lowe's Companies rallied +% and touched a record intra-day high (US$117.70) following an analyst upgrade that cited expectations of earnings acceleration for the home improvement retailer, particularly in relation to rival Home Depot Inc (%). The broader S&P500 unchanged although Intel Corp gained +3.1% after interim chief executive officer (CEO) Bob Swan said the company would be able to meet its full-year revenue outlook. The NASDAQ inched +0.05% higher despite Facebook Inc declining -2.6% after the technology giant said it recently found a security vulnerability that affected nearly 50M accounts. Tesla Inc sank -14% - it worst daily drop since Nov. 6, 2013 - after the Securities and Exchange Commission (SEC) sued Elon Musk, the electric-car maker’s chairman and chief executive officer (CEO). The SEC is alleging that Musk misled investors when he tweeted that he was considering taking the company private, and it is seeking to ban him from serving in his role of CEO. However, the SEC and Musk came to an agreement over the weekend that will see Musk retain his role as CEO but he must resign as Chairman within 45-days and cannot be re-elected to the role for three years. Musk will also pay a US$20M penalty to settle fraud charges brought by the SEC albeit Tesla or Musk admitted any wrongdoing under the settlement. Elsewhere, there are reports that Canada and the US are on the cusp of a tentative North Atlantic Free Trade Agreement (NAFTA) deal For the week, the Dow lost -1.07% and S&P500 -0.54%, while the Nasdaq added +0.74%. For the quarter, Dow outperformed with a +9.3% rise, while the S&P500 gained +7.2% (its best quarterly gain since the fourth quarter of 2013). Both the Dow and S&P500 have risen in 1 of the past 12 quarters. The Nasdaq rose for a ninth consecutive quarter, up +7.1% (its best quarterly performance since first quarter 2017). Healthcare was the best-performing sector of the third quarter, surging +14.1% - its best quarterly gain since the first quarter of 2013. Industrials and technology rose 9.7% and 8.5%. US equity markets were buoyed by corporate earnings, with calendar second-quarter earnings for the S&P500 rising 25% on a year-on-year basis, with 77.6% of companies topping analyst expectations (source: FactSet data).
