After the Close
The equity market advanced earlier this morning, but was unable to extend its gains. At the end of trading, the Dow Jones Industrial Average was ahead 15 points; the S&P 500 Index was up nominally; and the NASDAQ was lower by 18 points. Meanwhile, market breadth was still favorable, with winners ahead of losers on the NYSE. Further, most of the major equity groups managed to make some progress. The consumer, financial, and utility issues made respectable strides, while the technology and healthcare names retreated.
Meanwhile, traders received just one economic news item this morning. Specifically, durable goods orders slipped 1.1% during the month of May. Analysts had been looking for a better showing. Tomorrow, the Conference Board will release the Consumer Confidence Index for the month of June. So far, the consumer has remained optimistic, and this has helped fuel spending in a number of key categories. In addition, a report on housing prices will also be presented tomorrow.
Elsewhere, it was a light day for corporate news, and few major companies delivered financial reports. However, the pace will change dramatically, as the second quarter is in its final week, and the earnings season will soon follow. No doubt, traders will be looking to see how business has progressed. Further, the outlook for the remainder of the year will also be of importance.
Technically, the stock market continues to hold up well. However, equity valuations seem a bit extended at this point. So far, sentiment remains supportive, but that could change quickly, if the economic, or political, environment becomes too challenging. – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Mid-Day Update - 12:00 PM EDT
The U.S. equity markets opened higher this morning and appeared set to extend their winning ways, However momentum faltered early on, and trading has since been mixed.
Things are relatively quiet on the economic news front today. The Department of Commerce released its report on durable goods orders indicating a decline of 1.1% for May, which was larger than expected and the biggest drop in six months. Things pick up later in the week, though, as we will receive several key economic reports including the latest readings on consumer confidence, jobless claims, personal income and spending, and the final revision to first-quarter GDP.
As we approached the noon hour of trading in New York, the major stock indexes had bounced off their lows for the session. The Dow Jones Industrials, after gaining as much as 112 points from Friday’s close, were up 47 points; the broader S&P 500 Index was ahead by four, while the tech-heavy NASDAQ was off by 15 points.
Seven of the 10 major market sectors are in the green so far this morning. Utilities and consumer noncyclical stocks were out in front with gains of 1.0% and 0.5%, respectively. On the other side of the ledger, technology stocks, which had been among the front runners early on, were down about half a percentage point. Healthcare issues were down about half as much. Altogether, advancing stocks outnumbered decliners by a nearly 2-to-1 margin on the NYSE.
Meanwhile, stocks overseas put in a positive showing, with the key European bourses solidly in the green as today’s session was drawing to a close. France’s CAC-40 fared the best of the lot, advancing over half a percentage point, while London’s FTSE and Germany’s DAX weren’t far behind, with gains of about a third of a percent each. – Mario Ferro
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
Before the Bell
The final trading week of June, a month that has proven constructive for equities, will begin in familiar fashion, which is with the major U.S. market averages at or near all-time highs. It has been a very good month thus far for those long technology stocks, with the tech-heavy NASDAQ (up 1.8% last week) hitting all-time highs several times along the way. The gains have come despite some uneven U.S. economic data and a more hawkish Federal Reserve with regard to monetary policy. The equity averages continue to be helped by hope that more business-friendly policies from the Trump Administration are coming later this year and the growing sentiment that the upcoming second-quarter earnings season, which is a few weeks from kicking off, will be another good showing for Corporate America. Furthermore, some benign inflation readings of late also have investors questioning just how aggressive the Fed will be with regard to interest-rate hikes over the next six to 12 months.
At first blush, Friday’s trading session on Wall Street looked mixed. The Dow Jones Industrials fell a few points, while the S&P 500 Index and the white-hot NASDAQ posted modest gains. But if investors looked past the headline numbers, they would see that it was a more bullish than bearish trading session to end last week. There were a plurality of winning issues on both the Big Board and the NASDAQ; nearly all of the 10 major equity groups finished in positive territory; and the broader small- and mid-cap sectors posted larger gains than their large-cap brethren. In particular, there was notable buying in the small-cap sector, with the Russell 2000 up nearly three-fourths of a percentage point.
As noted, it was close to a clean sweep for the bulls among the top-10 equity groups. The leadership came from the economically sensitive sectors, with the most prominent buying seen in the energy, basic materials, and technology groups. In particular, the energy stocks were helped by a slight recovery in oil prices, which have taken a beating over the last fortnight of trading. Meantime, we saw some modest selling in the financial and utilities sectors.
Looking ahead to the week at hand, it will be another quiet five-day stretch for earnings, as the second quarter wraps up for most calendar year ending companies on Friday; though we will get the latest quarterly results from Dow-30 component NIKE (NKE - Free Nike Stock Report) on Thursday morning. That is not the case for the business beat, as we will receive a number of important economic reports, including the latest readings on consumer confidence, personal income and spending, and the final revision to first-quarter GDP. And just moments ago, the Department of Commerce reported that durable goods orders fell 1.1% in May, which was more than twice the expectation of -0.4%. It was another in a string of lackluster reports on the economy. Meanwhile, we will get speeches from a number of Federal Reserve leaders, including Fed Chair Janet Yellen tomorrow. The news from the business beat and the latest musings from Washington D.C. and the central bank leaders may play big roles in what direction the U.S. equity indexes head this week. Last week, a meeting at the White House between President Trump and a number of tech-industry CEOs gave the equity market a boost.
With less than an hour to go before the commencement of trading stateside, the equity futures are indicating a higher opening for the U.S. equity market, with the Dow Jones Industrials pushing closer to its record high, which was established earlier this year. The trading week got off to a strong start in Asia overnight and the major European bourses, helped by some encouraging European banking news, are sharply higher as trading moves into the second half of the session on the Continent. It is clearly looking like the bulls are going to get off to a fast start this week. Stay tuned. – Harvey S. Katz
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
