After The Close
The stock market moved up nicely this morning, surrendered some ground during the early afternoon, but managed to firm up again at the end of the session. Traders, looking for a trade deal to be signed with China, have been reacting daily to the flow of news on that subject. This has, no doubt, been the cause of some of the market volatility we have been seeing lately. At the end of trading today, the Dow Jones Industrial Average was ahead 55 points; the broader S&P 500 Index was up seven points; and the NASDAQ was higher by 15 points. Meanwhile, market breadth showed a somewhat uneven session, with advancers just ahead of decliners on the NYSE. Of note, services, industrials, and consumer stocks displayed leadership, while the healthcare and basic materials issues retreated.
Meanwhile, there were several economic reports released today, as this is a holiday week. Below are a few worth noting. The Consumer Confidence Index dipped to 125.5 for the month of November. Although this reading came in below the consensus forecast, it still shows that the consumer is in decent shape. Further, new home sales came in at 733,000 units for the month of October, which was down from the prior months showing, but still a respectable number, and well ahead of the prior-year figure. Tomorrow will be a very busy day for reports, as well. Along with many other issuances, we will get a look at the latest weekly initial jobless claims numbers, a revised third-quarter GDP estimate, as well as the monthly durable goods orders.
In the corporate arena, we heard from a few more retail operators today. Of note, shares of Best Buy (BBY) jumped in price, after the electronics retailer put out a solid report. Also, shares of Burlington Stores (BURL) moved nicely higher, as that company delivered an encouraging release.
Technically, the stock market continues its move higher. The S&P 500 Index is now above the 3,100 mark, and shows few signs of slowing down. It remains to be seen if the bulls can push stocks higher, or if a bout of profit taking will materialize, as the year draws to a close.
– 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
The stock market took the latest suggestion of progress on the trade front with China and ran with it yesterday morning, with equities pushing broadly and sharply higher from the start of the new trading day and week. On point, after indications were released that China was ready to put a so-called phase one trade deal in place, and that as a result the currently burdensome tariffs would be reduced, the market bounded ahead. Specifically, the Dow Jones Industrial Average moved up by more than 150 points in the first hour of trading.
Moreover, both the S&P 500 Index and the NASDAQ moved up to all-time records on this buying frenzy, which was led by the technology stocks. The small-cap Russell 2000 also surged forward. In all, as we passed the 1:00 PM (EST) hour, the Dow was still up by 140 points; the S&P 500 Index was better by 20 points; and the NASDAQ was some 100 points to the plus side. To be sure, there was nothing concrete in the trade situation and there is no assurance that a phase one deal will lower existing tariffs. But these were encouraging signs, nonetheless.
The market also was cheering the increase in merger announcements yesterday, with the phrase Merger Monday seemingly a reality once again. In addition to the deal making, the market was also comforted by the spate of good news on the economy, mostly on the housing front, where the past week or so has brought welcome increases in housing starts, building permits, and sales of existing homes. And later today, we shall get a look at sales of new homes during October.
Meanwhile, tomorrow will be an important day for economic news, as the government will release revised GDP figures for the third quarter. A month ago, the Commerce Department released data for the period showing a tepid 1.9% increase in the nation's gross domestic product. Also, tomorrow morning, we will be getting data on orders for durable goods. Finally, later this morning, we will be getting the monthly survey on consumer confidence from the Conference Board.
As to the stock market, it did not waver in its upward thrust throughout the afternoon, as optimism continued on the trade front. In all, the Dow continued to advance, finally concluding matters with a stealth gain of 190 points, bringing that index to the edge of an all-time record closing high. As noted, both the S&P 500 and the NASDAQ did achieve records, as they also ended matters at the day's best levels. Many technology and industrial issues also did well, especially the chip stocks, including NVIDIA Corporation (NVDA).
Looking ahead to a new day now and following yesterday's fireworks, the major averages posted small gains in Asia in the overnight hours, while in Europe, the principal bourses are showing slight early losses. Also of note, oil prices are generally steady and Treasury note yields, which closed yesterday at 1.76%, now are at 1.75%. Finally, ahead of some critical data the next 24 hours, the U.S equity futures are pointing to an undistinguished opening when trading resumes a little later this morning.
– Harvey S. Katz, CFA
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
