After The Close
The stock market put in a mixed-to-positive session today. Of note, traders seemed less certain that a trade deal between the U.S. and China would be signed in the near future. The constantly shifting situation has been playing itself out in the market for some time now, and this may continue to be the case in the weeks ahead. At the end of trading, the Dow Jones Industrial Average was ahead 92 points; the broader S&P 500 Index was up two points; while the NASDAQ was lower by four points. Market breadth was neutral, with winners just ahead of losers on the NYSE. From a sector perspective, the utilities and the consumer names pressed ahead, while the basic materials issues retreated.
In economic news, the Consumer Price Index (CPI) showed a 0.4% increase in the month of October, which was in line with expectations. Tomorrow, the Producer Price Index (PPI) will be released. We also will get a look at the latest weekly initial jobless claims.
In the corporate arena, the pace of earnings reports has calmed down. Although we are still hearing from some of the smaller names. Shares of Canada Goose (GOOS) moved lower today, after the apparel manufacturer provided a weaker-than-anticipated outlook. On balance, Energizer Holdings (ENR) stock moved up after that company put out a good report.
Technically, the stock market continues to hold up well. However, the recent gains are probably based on the idea that a deal with China will materialize. A disappointment on this front could lead to some consolidation. Further, with the market already up nicely for the year, some investors may be wondering if a holiday rally is plausible.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell
Leading the market higher were such high-profile names as Walt Disney (DIS – Free Disney Stock Report) and Facebook (FB) shares. But the big news was on trade, where the President hinted at enthusiasm around a potential U.S.-China trade deal. In the process, the NASDAQ and the S&P 500 made fresh all-time highs, while the Dow approached another record. However, details were few on any trade breakthrough, with the President instead using the time to criticize the Federal Reserve for its reluctance to lower interest rates further. So, the stock market began to move in place for a time as the afternoon sped along.
Meanwhile, the day was again short on economic news, as earnings season also was slowing down after a heavy dose of reports in the past few weeks. As to key data issuances, the government will be releasing surveys on industrial production tomorrow and retail spending on Friday. Expectations are that industrial production was down another 0.4% in October, while the latest trends in capacity utilization point to a further setback on that front as well. Estimates, meantime, call for small comebacks on the retail side after disappointing results in September.
As to the stock market, the Dow would hold onto diminishing gains until about 2:00 PM (EST), when a spate of selling developed taking the blue chips into the red. The S&P 500 Index and the NASDAQ would follow along, as would the smaller-cap composites. However, the reversal would not last all that long, and soon thereafter the S&P 500 and the NASDAQ both would edge back into the green, albeit not convincingly. This back and forth would persist into the final hour. But as the closing bell arrived, the market again had a positive tone to it, with the S&P 500 and the NASDAQ nicely in the green, and the Dow essentially breakeven.
Looking ahead to a new day now, and following yesterday's generally positive conclusion in New York, we see that the stock market was lower in Asia in the overnight hours on growing concerns about the civil unrest in Hong Kong. In Europe, meanwhile, the leading bourses are exhibiting early weakness on fresh trade deal concerns with China and the United States. In other markets, oil prices are down; Treasury note yields, off modestly yesterday, are easing off anew; and the U.S. equity futures are showing initial losses.
So, we could follow up yesterday's modest win with a setback in the early going this morning.
