The US economy started off 2018 in strong fashion as US equity markets continued their surge into January. The Dow Jones Industrial Average (DJIA) climbed 5.8% to 26,150.63, while the S&P 500 similarly rose 5.6% to 2,824.12 for the month. The NASDAQ composite increased 7.4%, the most of the three, to finish at 7,411.48.

US GDP increased at an annual rate of 2.6% in the fourth quarter of 2017, falling behind third quarter GDP growth of 3.2%. However, the Bureau of Economic Analysis (BEA) announced that a more complete estimate will be reported next month. US GDP growth in fourth quarter 2017 was primarily driven by increased residential and non-residential fixed investments, exports, government spending and personal consumption. Relatedly, disposable personal income rose 3.9% to $139.0 billion, contributing to the economic expansion.

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Laboratory Instruments and Products Stocks

In January, IBO’s Laboratory Instruments and Products Stock Index leaped 12.2% to 378.60. A majority of the Index finished the month in positive territory, with Harvard Bioscience delivering the fastest monthly growth, up 42.4%. Harvard Bioscience closed the month at $4.70, delivering significant year-over-year growth as well, rising 56.7%. On January 23, Benchmark Capital raised the stock’s target price from $6.00 to $10.00. Conversely, Enzo Biochem’s share price fell the most in January, down 9.7% to close at $7.36. For Enzo Biochem, this represents a five-month consecutive decline, starting from September of last year.

Also gaining double digits were Becton, Dickinson, Thermo Fisher Scientific and Waters. Agilent Technologies’ share price closed at $73.44, nearly reaching double-digit growth at 9.7%. Agilent shares received a “buy” rating, along with a target price of $76.00 from Robert W. Baird on January 18.

Becton, Dickinson shares rose 13.5%, closing at $242.98. On January 19, Bank of America reiterated its “buy” rating for the company’s stock, with a target price of $260.00.

On January 16, Fluidigm registered one million shares of common stock, with a proposed price of $6.46 per share, amounting to an aggregate offering price of $6.5 million. For the month, Fluidigm’s share price advanced 4.1%, closing at $6.13. Relatedly, Nanostring Technologies entered into a sales agreement with Cowen and Co., selling the company’s shares of common stock. The aggregate sales proceeds amount to $40 million.

Illumina shares grew moderately, up 6.5%, to close the month at $232.64. On January 16, Deutsche Bank set a “buy” rating, along with a target price of $275.00 for the stock. On January 30, the company reported adjusted fourth quarter 2017 net income of $212 million, a 68.2% increase. Adjusted EPS for the quarter amounted to $1.44, a significant leap of 69.4%. As for full year 2017, adjusted EPS grew 20.1% to $4.00. The company expects 2018 adjusted EPS to be between $4.50 and $4.60

Thermo Fisher Scientific reported its fourth quarter 2017 earnings on January 31. Adjusted fourth quarter 2017 EPS grew double digits, up 15.8% to $2.79. For the full year 2017, adjusted EPS rose 15.0% to $9.49, driven by higher operating margins. Additionally, the company announced an increase in quarterly dividends. Thermo Fisher reported a quarterly cash dividend payout of $0.17 per share, payable on April 16, representing a 13.0% increase. For the month, Thermo Fisher’s share price jumped 18.0% to $224.13.

Waters delivered adjusted fourth quarter 2017 EPS growth of 13.6%, announced on January 23. Fourth quarter 2017 adjusted EPS amounted to $2.51, as compared to $2.21 in 2016. For the full year, adjusted EPS increased 13.0% to $7.49. Share price for the month climbed 11.6%, finishing at $215.68. On January 24, Citigroup boosted the stock’s target price from $190.00 to $223.00.

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Diversified Laboratory Stocks

IBO’s Diversified Laboratory Stocks Index advanced 4.5% to close the month at 284.24. The Index grew steadily in January, increasing at an average rate of mid-high single digit growth. Danaher grew the fastest of all the stocks in the Index, rising 9.1% to close at $101.29. On January 30, Danaher reported its fiscal 2017 earnings, for which the company delivered an adjusted EPS of $4.03, up 11.5%. Adjusted EPS for the fourth quarter of 2017 grew similarly, up 13.5% to $1.19, beating analysts’ expectations of $1.15. The company expects its first quarter 2018 adjusted EPS to be between $0.90 and $0.93. As for the full year, Danaher projects adjusted EPS of $4.25–$4.35.

Similarly, Roper Technologies was up, growing 8.1% to end the month at $279.89. On January 18, Wells Fargo set a “buy” rating for the stock, along with a boosted price target of $310.00. The new price target signifies a price increase of $15, or 5.1%.

Honeywell reported its full-year 2017 earnings on January 26, delivering strong profitability. Fourth quarter 2017 adjusted EPS grew 6.3% to $1.85, exceeding analysts’ expectations. For the full year 2017, adjusted EPS advanced 10.0% to $7.11, driven by stronger margins. Throughout 2017, Honeywell increased dividends by 12%. The company also spent $2.9 billion in share repurchases in 2017, $1.6 billion alone in the fourth quarter. For 2018, the company expects its adjusted EPS to be $7.75–$8.00, an increase over the previously projected $7.55–$7.80. With the new guidance, adjusted EPS is expected to show a 9%–13% increase. On January 26, Bank of America set a “buy” rating and boosted the stock’s target price from $117.12 to $168.00 for the stock. For the month, Honeywell shares climbed 4.2% to close at $159.74.

Illinois Tool Works (ITW) shares also grew at a similar pace, advancing 4.1% to $173.73 for the month. The company reported its fourth quarter and full-year 2017 earnings on January 24, delivering strong growth results. Fourth quarter 2017 adjusted EPS increased 22.3% to $1.70, while full-year adjusted EPS grew 16.0% to $6.59. For the first quarter of 2018, ITW expects its EPS to be between $1.80 and $1.90. For the full year, the company projects EPS to be $7.45–$7.65. Additionally, ITW plans to increase its dividend pay-out ratio from 43% to around 50% of free cash flow starting in August. The following day, on January 25, Wells Fargo raised the stock’s target price by $10 to $200.

Corning was the only company in the Index to have experienced a decrease in share price for the month. Corning shares fell 2.3% to $31.25, despite Citigroup’s price target boost from $33.0 to $35.0. The company reported its full-year 2017 earnings on January 23, delivering an adjusted EPS of $0.49, down 2.0%. However, adjusted EPS rose sequentially, increasing 13.9% from the third quarter. For the entire year of 2017, Corning reported adjusted EPS of $1.72, an 11% increase.

International Stocks

Asia Pacific market indexes remained solid as most ended January in positive territory. Hong Kong’s Hang Seng advanced nearly double digits, up 9.9% to finish at 32,887.27. China’s Shanghai Composite, along with India’s Sensex 30 both delivered mid-single digit growth, up 5.3% and 5.6%, respectively. However, Australia’s All Ordinaries fell slightly, sliding 0.4% to 6,146.60.

For IBO’s Stock Index, shares in the Asia Pacific ended the month in green, with the exception of Precision System Science, for which its share price fell 5.4% to ¥625.0 ($5.71 at ¥109 = $1). Techcomp increased the fastest among the Asia Pacific shares, soaring 27.9% to close at HKD 2.29 ($0.29 at HKD 7.8 = $1). The remainder of the Asia Pacific shares expanded on average in the mid-high single digits.

In the European region, market indexes that IBO tracks showed moderate growth, as most increased by low to mid-single digits. Italy’s FTSE MIB advanced the fastest, increasing 7.6% to 23,507.06. Conversely, UK’s FTSE 100 slipped the most, down 2.0%. Similarly, Switzerland’s SMI fell slightly, declining 0.5%.

European shares in the IBO Stock Table grew at notable rates, with Scientific Digital Imaging vaulting 29.9% to £0.32 ($0.46 at £0.70 = $1). Similarly, Sartorius’ share price also increased significantly, up 18.0% to €89.0 ($111.2 at €0.80 = $1). The company reported its preliminary 2017 earnings on January 31, delivering 9.3% revenue growth. Furthermore, Sartorius reported an increase of 8.5% in earnings, amounting to €353.2 million ($441.6 million).  The company expects profitability to increase even further in 2018.

Abcam also reported its preliminary earnings this month, on January 5. Abcam announced its half-year results, for which sales were estimated to have grown at around 11%. For the month, Abcam’s share price advanced 16.6% to £12.30 ($17.55). The remaining European shares performed modestly, with just Horizon Discovery and Merck KGaA experiencing a decline in share price, down 3.8% and 1.9%, respectively.

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