After The Close
The U.S. stock market put in a meandering and somewhat weak showing today, as investors looked for signs that negotiations with China were still progressing. Of note, another round of tariffs is scheduled to take effect on December 15th, which is of some concern to traders on Wall Street. Many are hoping that this course of action will be postponed, and that talks will continue unimpeded. However, so far the picture remains unclear. At the end of today’s session, the major averages closed in negative territory. The Dow Jones Industrial Average was down 28 points; the broader S&P 500 Index was off three points; and the NASDAQ was lower by six points.
Market breadth was mixed, with advancers about even with decliners on the NYSE. From a sector perspective, the healthcare and basic materials issues managed to make some progress, while the financial stocks took a step back.
Elsewhere, there were no major economic news items to report today. Tomorrow should be a bit busier. Specifically, the November Consumer Price Index (CPI) will be released, and that figure will be of importance to investors studying the inflation outlook. So far, consumer and producer prices have remained tame, despite the nation’s ongoing economic strides. In the afternoon, the FOMC wraps up its two-day policy meeting and will make an interest-rate decision, as well and comment on the broader economy. We do not anticipate that the Federal Reserve will lower rates at this meeting.
In the corporate arena, a few retailers delivered reports recently. Specifically, shares of AutoZone (AZO) moved up after the auto-parts retailer posted an encouraging report. Meanwhile, shares of Casey’s General Stores (CASY) declined in response to a softer-than-anticipated outlook.
Technically, the stock market seems to be in need of some direction at this point. This is especially the case, given that the major averages have already logged sizable gains this year, and investors may be wondering what lies ahead.
– 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
However, concerns about the upcoming FOMC statement, which the Federal Reserve will provide after tomorrow's meeting concludes was getting some traders nervous. So, too, was the looming December 15th deadline for the United States and China to reach at least a partial trade deal before new tariffs kick in. At this juncture, sentiment is that some deal will be forthcoming by the deadline. Also, the consensus is that the Fed will stand pat on its federal funds rate target this week, and perhaps through 2020.
Then, there is the continuing flood of critical economic reports to come out this week. Readers will recall that this past Friday we saw the release of a blockbuster jobs report for November, in which our country added 266,000 new positions, which was well about the expected 187,000 increase. Stocks surged on that news. As for this week, we will get data on consumer prices tomorrow, figures on producer prices on Thursday, and the monthly release on retail sales on Friday.
Meanwhile, the stock market started to give more ground in the afternoon, and the selling, albeit never significant, and little more than incidental profit taking, continued into the close. All told, the Dow would surrender 105 points, bringing that index back slightly below 28,000. Also, the S&P 500 would lose 10 points and the NASDAQ would decline 35 points. As for trade, even if a deal is not consummated by this Sunday's deadline, it is possible that the Administration will hold off on adding new tariffs.
Looking ahead to the new day now, we see that the FOMC meeting is about to get under way. It is scheduled to wind up tomorrow afternoon. Ahead of all this, the equity futures are poised to open the session modestly to the upside, however trade war concerns as the deal deadline approaches may influence the session.
