Many retailers struggled last year, but 2017 was a very exciting time for investors.
When the stock market opened for trading in 2017, the Dow Jones Industrial Average was 19,762 points, a gain of 13.5 percent for the year, while the Standard & Poor (S&P) 500 index was 2,239 points, up 9.5 percent, and the Nasdaq index was 5,383 points, up 7.5 percent.
At the same time, the unemployment rate was 4.7 percent, which was down 0.3 percent from the start of the year and 0.1 percent higher than the November rate, which was the lowest since 2007. Job growth was also strong with 12 consecutive months of jobs added. There hadn’t been a month with job losses since 2010.
Was 2017 a better business year than 2016? On the surface, it definitely looks that way. Here are the top ten developments we saw:
1. Stock Market Boom:
What a year!! When the stock market closed for the year on Dec. 29, the Dow was 24,719 points, up 25.2 percent, while the S&P was 2,674 points, up 19.5 percent, and the Nasdaq was 6,903 points, up 28.2 percent. “The steady rise has generated trillions in gains for investors as Wall Street banked on strong corporate profits, global economic strength and Republican efforts — led by President Trump — to cut business taxes and curb regulations,” reports The Washington Post article “Stock markets wrap up best year since 2013 as investors shrug off bad news.”
2. Job Market Boom:
The unemployment rate just kept dropping during 2017. The December report hasn’t yet been released at the time of writing, but the jobless rate was 4.1 percent in November, the lowest rate since the Dec., 2000 report. Job growth was also strong. About 1,916,000 jobs were added to the economy in the first 11 months of the year, with more than 200,000 jobs added in seven of those months. In 2016, there were five months with more than 200,000 jobs. In addition, economic growth was 3.2 percent in the third quarter of the year after quarters of 1.2 and 3.1 percent growth.
3. Retail Industry Busts:
USA Today called 2017 the year of the “retail apocalypse,” because it set the record for most store closings announced — at least 6,700. Wealth Authority reported on how retailers can survive while so many stores are closing. J.C. Penney, Kmart, Macy’s and Sears were among the retail chains that closed dozens or hundreds of stores.
4. Retail Industry Bankruptcies:
It should be pointed out that the problems that many major retailers had during 2017 does not necessarily mean that the retail industry as a whole fared poorly during the year. Wealth Authority reported about how toy stores all over the USA were flourishing while Toys ‘R’ Us struggled. The toy retail giant actually filed for bankruptcy during 2017. Other retailers that did the same include Radio Shack, Hh gregg, Gymboree, The Limited, Wet Seal, Payless ShoeSource, BCBG Max Azria, Gordman’s Stores, and True Religion.
5. Bitcoin’s Value Explodes:
Did you know what Bitcoin was on Jan. 1, 2017? Why should you have known that Bitcoin is “a digital currency created for use in peer-to-peer online transactions” when its value was so low from the day it was created in 2009 through most of 2016. On Jan. 1, 2017, one Bitcoin was worth $974.97. By mid-December, it was worth $19,209.49. Its value was about $15,000 at year’s end, but still had a great 2017.
6. Amazon’s Amazing Year:
USA Today ranked Amazon’s “empire building” as the No. 1 business or technology story of 2017. It had 42 percent of the online sales market, and 52 percent of the cloud storage market — but the company has grander ambitions. During 2017, it bought Whole Foods for $14.7 billion, a purchase that “turned the grocery business on its head” according to the Chicago Tribune. Amazon is also interested in grocery delivery and drug sales.
7. Media Mergers:
As Wealth Authority reported recently, the television industry is undergoing tremendous changes because of the dramatically increasing popularity of video streaming, and the decreasing popularity of traditional broadcast and cable television. Consequently, major companies AT&T, Disney, and Sinclair Broadcasting have announced deals to purchase Time Warner, a large part of 21st Century Fox, and Tribune Media respectively. All three mergers need to be approved by the U.S. Justice Department.
8. New Automobiles:
The year was an excellent one for electric cars and self-driving cars. USA Today reports that electric cars “went from science experiments to the object of automaker infatuation” during the year. General Motors, Ford, Mercedes, and Tesla were among the companies that announced plans to build electric cars in 2017. The companies that worked on self-driving cars during 2017 include Audi, Ford, GM, Google, Honda, Hyundai, Mercedes-Benz, Nissan, Peugeot, Renault, Tesla, Toyota, and Volvo.
9. Lots Of Deregulation:
The Trump Administration might not be the Trump Administration if Donald Trump hadn’t pledged during the 2016 presidential campaign to help small and large businesses by reducing how strictly the U.S. government regulated them. Trump claimed he killed 1,579 proposed rules before they were adopted. “The cuts made good on his goal to repeal two regulations for every new one enacted,” USA Today reports. Among other things, a Trump executive order killed the U.S. Clean Power Plan.
10. Corporate Tax Cuts:
As the year came to a close, President Trump signed into law a bill that could have a large impact on businesses large and small in 2018. As of Jan. 1, the tax rate on corporate income is 21 percent, a dramatic reduction from the previous 35 percent rate. The tax savings could spur CEOs and entrepreneurs to create more jobs in 2018, increase wages, invest more money in equipment that will improve their efficiency, improve their products and services, and expand their companies. The new law also provided tax cuts for individuals — particularly those in the middle class.
Regards,
Ethan Warrick
Editor
Wealth Authority
