Before The Bell
The stock market, up strongly to start the week on Monday, following a lackluster five-day span the week before, edged upward in trading yesterday. Again, it was continuing optimism on trade and a spate of upbeat earnings reports from such retailers as Best Buy (BBY) that led the way higher for the market. In all, as we hit the noon hour in New York, the Dow Jones Industrial Average was ahead by 50 points, bringing that index to another all-time high. Modest gains were tabulated by the S&P 500 Index and the NASDAQ. A better-than-three-point rise in the hares of entertainment icon Walt Disney (DIS – Free Walt Disney Stock Report) led the blue chips higher.
The market, meantime, continues to head higher, with records likewise being set by the S&P 500 and the NASDAQ. Overall, it is optimism on trade with China, specifically expectations that a phase one trade accord can be reached with that country before yearend that is pushing stocks higher. Optimism that the Federal Reserve will continue to take an accommodative stance on interest rates, even it does not lower them further in the months ahead, is also providing support for the stock market. Stocks, meantime, continued in a festive pre-Thanksgiving mode as the lunch hour got under way.
In other news, we received a pair of key economic reports yesterday morning. In one issuance, the government reported that sales of new dwellings were at a seasonally adjusted annual rate of 733,000 in October. That was nominally below the 738,000 new homes sold in September, but was better than 30% above the October, 2018 estimate of 557,000. Looking at the year-to-date performance, the latest tally of 733,000 homes estimated to have been sold on an annual basis last month represented the third highest tally for the year so far and suggested that this sector was getting a second wind due to falling mortgage rates.
In the second key metric released, the Conference Board, a research group, indicated that its consumer confidence survey had stayed at a high level in November, coming in at a reading of 125.5. In October, the tally was just nominally above that at 126.1. Even as this metric eased for a fourth month in succession, the aggregate result was still high enough to suggest that the upcoming Christmas selling season should be decent, overall. These back-to-back issuances were supportive, in the main. Housing also was underpinned by data showing that home price gains accelerated in September.
As to the stock market, it continued to trade higher, but at levels that were below the morning peaks until some late buying changed that. The averages looked a bit tired at this point and perhaps ripe for some profit taking. But no serious selling ensued, and so as we hit the homestretch of the trading day, the averages were all sitting with decent gains and in new high ground. All told, the Dow concluded matters, after a last-minute buying program, up by 54 points; the S&P 500 was better by seven points; and the NASDAQ was ahead by 15 points.
Looking out at a new day now and peering overseas on this get-away day before Thanksgiving, we see that stocks are at a four-year high in Europe this morning on trade optimism. Elsewhere, oil prices are little changed, and Treasury note yields, which backed off slightly to 1.74% on the 10-year vehicle, now are passing hands at similar levels. Further, the U.S. equity futures are showing early increases, suggesting that the market will open to the upside today. Finally, let us take this opportunity to wish our readers a happy and safe Thanksgiving.
– Harvey S. Katz, CFA
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
