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Another Day, Another Record
12-Jan-18 16:25 ET
Dow +228.46 at 25803.19, Nasdaq +49.28 at 7261.06, S&P +18.68 at 2786.24
https://www.briefing.com/investor/markets/stock-market-update/2018/1/12/another-day-another-record.htm
[BRIEFING.COM] Stocks ripped to new records for the second day in a row on Friday, extending their fantastic start to 2018.
The Dow Jones Industrial Average rallied 0.9% to 25803.19, the S&P 500 jumped 0.7% to 2786.24, and the Nasdaq Composite climbed 0.7% to 7261.06. The small-cap Russell 2000 kept pace for the first half of the session, but trimmed its gain in the afternoon, closing higher by just 0.3%. All four stock indices finished at new record highs.
The equity market was slightly higher at the opening bell and climbed pretty steadily throughout the day, finishing near its session high. The Dow, the S&P 500, and the Nasdaq added between 1.6% and 2.0% for the week, increasing their 2018 gains to 4.2%-5.2%.
JPMorgan Chase (JPM 112.67, +1.83), Wells Fargo (WFC 62.55, -0.46), PNC (PNC 151.84, +0.35), and BlackRock (BLK 555.53, +17.61) kicked off the fourth quarter earnings season on a mostly positive note as all four reported better-than-expected earnings. However, their revenue results were mixed; JPMorgan and Wells Fargo missed estimates, while PNC and BlackRock beat expectations. The financial sector stayed in line with the broader market for most of the day and then rallied in the final minutes to settle higher by 0.9%.
The consumer discretionary sector was the top-performing group on Friday with Lowe's (LOW 100.86, +5.12) setting the pace. The home improvement retailer jumped 5.4% following reports that investor D.E. Shaw has build an active stake in the company. Nordstrom (JWN 51.82, +1.73) also outperformed, adding 3.5%, following a CNBC report that the Nordstrom family is considering resuming efforts to take the company private.
Meanwhile, the industrial sector (+0.9%) had another positive outing as Boeing (BA 336.21, +8.09) hit another record high, and the energy sector (+1.0%) rallied amid another positive day in the crude oil market; West Texas Intermediate crude futures jumped 0.6% to $64.21 per barrel. Boeing shares finished higher by 2.5%.
On the downside, the consumer staples (unch), utilities (-0.6%), and real estate (-0.7%) sectors struggled, extending losses for the year. The top-weighted technology sector (+0.6%) managed to settle roughly in line with the broader market, but social media giant Facebook (FB 179.37, -8.40) tumbled 4.5% amid concerns that changes to its news feed will be less engaging for users, prompting them to spend less time on the site.
In the bond market, U.S. Treasuries were under pressure, pushing yields higher; the benchmark 10-yr yield climbed two basis points to 2.55% while the 2-yr yield jumped four basis points to 2.00%. The 10-yr yield shot to 2.59% immediately following the release of the core Consumer Price Index for December, which showed a larger-than-expected increase of 0.3% (Briefing.com consensus +0.2%), but began backtracking soon thereafter.
Elsewhere, the Euro Stoxx 50 (+0.4%) broke a two-session losing streak after German Chancellor Angela Merkel's CDU/CSU agreed to a blueprint for a grand coalition with its former coalition partner SPD. To be clear, an agreement has not been finalized, but the situation finally looks promising after months of uncertainty.
The euro climbed to a three-year high against the U.S. dollar following the news, jumping 1.3% to 1.2184.
In Asia, stocks ended Friday mostly higher with Hong Kong's Hang Seng (+0.9%) and China's Shanghai Composite (+0.1%) extending their winning streaks to 14 and 11 sessions, respectively. Economic data from China showed the largest trade surplus in two years ($54.69 billion actual vs $37.00 billion consensus).
Reviewing Friday's economic data, which included the Consumer Price Index for December, Retail Sales for December, and Business Inventories for November:
Total CPI increased 0.1% (Briefing.com consensus +0.2%) in December while core CPI, which excludes food and energy, rose 0.3% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.1% (from 2.2% in November) and core CPI is up 1.8% (from 1.7% in November).
The key takeaway from the report is that it won't change the Fed's prevailing expectation that three rate hikes are in order this year. That could be serving as a disruptive thought for traders who were likely inclined after yesterday's weaker than expected PPI report to think the Fed might think three rate hikes could be too many.
December retail sales increased 0.4% (Briefing.com consensus +0.4%). The prior month's increase was revised to 0.9% from 0.8%. Excluding autos, retail sales increased 0.4% in December while the Briefing.com consensus expected an increase of 0.4%. The prior month's increase was revised to 1.3% from 1.0%.
The key takeaway from the report is that it should underpin the belief that favorable economic drivers continue to act as an expedient for increased consumer spending activity that will benefit Q4 GDP growth.
Business Inventories increased 0.4% in November (Briefing.com consensus +0.3%). The October reading was revised to 0.0% from -0.1%.
The key takeaway from the report is that sales growth is outpacing inventory growth, which is a step toward regaining some pricing power.
The stock market will be closed on Monday in observance of Martin Luther King Jr. Day. On Tuesday, Citigroup (C 76.84, +1.28) and UnitedHealth (UNH 228.64, +3.25) will report fourth quarter results before the opening bell, and the Empire State Manufacturing Index for January (Briefing.com consensus 19.0) will be released at 8:30 AM ET.
Nasdaq Composite: +5.2% YTD
Dow Jones Industrial Average: +4.4% YTD
S&P 500: +4.2% YTD
Russell 2000: +3.7% YTD
Week In Review: Rally Keeps on Rolling
Equities kept the new year rally rolling this week with the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500 adding between 1.6% and 2.0%. All three major U.S. indices finished Friday at record highs and now hold year-to-date gains between 4.2% and 5.2%.
The fourth quarter earnings season unofficially began on Friday with reports from financial heavyweights JPMorgan Chase (JPM) and Wells Fargo (WFC). Both companies beat earnings expectations, but came up short on revenues. PNC (PNC) and BlackRock (BLK) also reported, beating both earnings and revenue estimates.
The financial sector rallied 0.9% on Friday following the earnings releases, settling the week with a gain of 2.9%. A curve-steepening sell off in the Treasury market, which increased the 2yr-10yr spread by three basis points to 55 basis points, was a boon to the financial group.
Treasuries sold off due to several factors, including the Bank of Japan's decision to trim its daily purchases of Japanese government bonds, minutes from the European Central Bank's last policy meeting that revealed the ECB could begin preparing investors for the end of its bond-buying program early this year, and a Bloomberg report that China may slow or halt its purchases of U.S. Treasuries--however, Chinese officials later denied the report.
In addition, the core Consumer Price Index increased more than expected in December (+0.3% actual vs +0.2% Briefing.com consensus), which also contributed to the Treasury sell off.
The yield on the benchmark 10-yr Treasury note settled the week higher by seven basis points at 2.55%, but traded as high as 2.60%--its best level since March 2017. The 2-yr yield, meanwhile, advanced four basis points to 2.00%.
Outside of financials, the consumer discretionary (+3.1%), industrials (+3.2%), and energy (+3.2%) sectors had strong performances this week. Energy benefited from another increase in the price of crude oil, which climbed 4.5% to $64.21 per barrel, touching its highest level since December 2014.
In the industrial sector, transports showed particular strength, pushing the Dow Jones Transportation Average higher by 4.2%. The DJTA finished Friday at a record high.
On the downside, the lightly-weighted utilities (-2.1%), telecom services (-2.1%), and real estate (-3.5%) sectors struggled, extending their year-to-date losses; the three groups have lost between 3.4% and 5.3% since the start of 2018.
The top-weighted technology sector (+0.9%) underperformed with chipmakers showing relative weakness following a solid start to the year; the PHLX Semiconductor Index lost 0.3%. Facebook (FB) tumbled 4.5% on Friday amid concerns that changes to its news feed will cause users to spend less time on the site.
Investors Buy the Dip Ahead of Q4 Earnings
11-Jan-18 16:30 ET
Dow +205.60 at 25574.73, Nasdaq +58.21 at 7211.78, S&P +19.33 at 2767.56
https://www.briefing.com/investor/markets/stock-market-update/2018/1/11/investors-buy-the-dip-ahead-of-q4-earnings.htm
[BRIEFING.COM] Stocks rallied to new records on Thursday as investors geared up for the fourth quarter earnings season, which will begin on Friday.
The small-cap Russell 2000 set the pace, jumping 1.7% to 1586.79. The Nasdaq Composite climbed 0.8% to 7211.78, the Dow Jones Industrial Average increased 0.8% to 25574.73, and the S&P 500 rose 0.7% to 2767.56. All four indices finished at new all-time highs.
'Buy the dip' was the name of the game on Thursday; the major stock indices opened with modest gains after registering slim losses in the prior session. Wednesday's downtick marked the first losses of the year for both the S&P 500 and the Nasdaq and just the second for the Dow.
Buying picked up throughout Thursday's session, especially in the final minutes, leaving the major indices at their session highs. Eight of eleven sectors advanced with the energy (+2.0%), consumer discretionary (+1.6%), industrials (+1.3%), and materials (+1.3%) groups being the top performers.
The energy sector was up as much as 2.4% thanks to a crude oil rally, which saw West Texas Intermediate crude futures jump 1.9% to $64.35 per barrel--their best level since December 2014. However, energy shares trimmed gains in the afternoon when WTI crude gave back much of its advance, settling higher by just 0.4% at $63.79 per barrel.
Meanwhile, in the industrial sector, heavyweights like Boeing (BA 328.12, +7.86) and Caterpillar (CAT 169.20, +3.33) climbed to new record highs, adding 2.5% and 2.0%, respectively. Transports also outperformed, pushing the Dow Jones Transportation Average (+2.3%) to a new record.
Within the DJTA, Delta Air Lines (DAL 58.52, +2.66) showed particular strength, adding 4.8%, after reporting better-than-expected earnings and revenues for the fourth quarter and raising its profit guidance for 2018. DAL shares finished at a new all-time high.
Retailers set the pace in the consumer discretionary sector, sending the SPDR S&P Retail ETF (XRT 47.28, +1.14) higher by 2.5%. Retailers picked up steam following news that Wal-Mart (WMT 100.02, +0.35) will be closing a series of Sam's Club stores. Costco (COST 189.38, +3.96), Sam's Club's main rival, added 2.1%.
Wal-Mart also made headlines after announcing that it will raise wages for hourly employees, expand maternity and parental leave benefits, and provide one-time cash bonuses of up to $1,000. The world's largest retailer said the recent tax overhaul fueled its decision.
On the downside, the consumer staples (-0.1%), utilities (-0.4%), and real estate (-0.7%) sectors declined on Thursday, extending their year-to-date losses to 0.4%, 4.0%, and 4.6%, respectively. For comparison, the S&P 500 has added 3.5% year to date.
In the bond market, U.S. Treasuries rallied in a curve-flattening trade that pushed the benchmark 10-yr yield lower by two basis points to 2.53% and left the 2-yr yield flat at 1.96%. Chinese officials denied the Wednesday report that China may slow or halt its purchases of U.S. Treasuries.
Elsewhere, the major European stock indices finished Thursday mixed after the European Central Bank released the minutes from its last meeting, which noted that the ECB could begin preparing investors for the end of its bond-buying program early this year. The euro jumped following the minutes, climbing 0.7% against the U.S. dollar to 1.2032.
In Asia, equity indices finished mostly higher, but reports that the South Korean government is seeking to ban all cryptocurrency trading weighed on Bitcoin, which tumbled 7.2% to $13,451.
Reviewing Thursday's economic data, which included the Producer Price Index for December, the weekly Initial Claims report, and the Treasury Budget for December:
Producer prices declined 0.1% in December (Briefing.com consensus +0.2%) and core producer prices also decreased 0.1% (Briefing.com consensus +0.2%). Year-over-year, producer prices are up 2.6% (down from 3.1% in November) and core producer prices have risen 2.3% (down from 2.4% in November).
The key takeaway from the report is that there was a deceleration in the Producer Price Index, which will temper concerns about potential pass-through effects to the consumer and perhaps quell some of the budding inflation concerns that have contributed to some of the weakness in longer-dated Treasury securities to begin the year.
The latest weekly initial jobless claims count totaled 261,000, while the Briefing.com consensus expected a reading of 248,000. Today's tally was above the unrevised prior week count of 250,000. As for continuing claims, they declined to 1.867 million from a revised count of 1.902 million (from 1.914 million).
Initial claims have picked up the last few weeks, yet the streak below 300,000 has stretched to 149 straight weeks, serving as a reminder that labor market conditions continue to be favorable.
The Treasury Budget for December showed a deficit of $23.2 billion (Briefing.com consensus -$47.5 billion) versus a deficit of $27.3 billion for December 2016.
The Treasury Budget data is not seasonally adjusted, so the December deficit cannot be compared to the $138.5 billion deficit registered in November.
On Friday, investors will receive the Consumer Price Index for December (Briefing.com consensus +0.2%) at 8:30 AM ET, Retail Sales for December (Briefing.com consensus +0.4%) also at 8:30 AM ET, and Business Inventories for November (Briefing.com consensus +0.3%) at 10:00 AM ET.
JPMorgan Chase (JPM 110.84, +0.59) and Wells Fargo (WFC 63.01, -0.11) will report earnings on Friday morning, unofficially marking the start of the Q4 earnings season.
Nasdaq Composite: +4.5% YTD
S&P 500: +3.5% YTD
Dow Jones Industrial Average: +3.5% YTD
Russell 2000: +3.3% YTD
Perfect No More; Winning Streak Comes To An End
10-Jan-18 16:25 ET
Dow -16.67 at 25369.13, Nasdaq -10.01 at 7153.57, S&P -3.06 at 2748.23
https://www.briefing.com/investor/markets/stock-market-update/2018/1/10/perfect-no-more-winning-streak-comes-to-an-end.htm
[BRIEFING.COM] Stocks slipped from record highs on Wednesday with the S&P 500 and the Nasdaq registering their first losses of 2018. All three major U.S. indices--the S&P 500, the Nasdaq, and the Dow Jones Industrial Average--lost 0.1% while the small-cap Russell 2000 finished flat.
A Bloomberg report that China may trim or halt its purchases of U.S. Treasuries prompted overnight selling in the Treasury market, sending the yield on the benchmark 10-yr Treasury note to its highest level since March 2017. The higher yields pushed equity investors to take some profits at the start of Wednesday's session.
The Dow, the S&P 500, and the Nasdaq hit their worst marks of the day shortly after the opening bell, holding losses between 0.5% and 0.7%.
However, investors quickly bought the dip thanks in part to a CNBC interview with legendary investor Warren Buffett, who stated that he remains a net buyer of stocks, citing low interest rates and the recently passed tax reform legislation.
Equities eventually reached their flat lines in the afternoon but slid back into the red following a Reuters report that Canada believes that U.S. President Donald Trump will soon pull the United States out of the North American Free Trade Agreement (NAFTA). General Motors (GM 43.00, -1.05), which was flat ahead of the report, finished lower by 2.4%.
The market made one last run in the final minutes, but ended just short of its unchanged mark. Nine of eleven sectors finished in negative territory with the financials (+0.9%) and industrials (+0.1%) groups being the two advancers.
The financial sector, which is the second heaviest group by weight, advanced at the opening bell due to the increase in Treasury yields and managed to keep the bulk of its gain even though yields returned to their flat lines following a $20 billion 10-yr note reopening that was met with strong demand. The benchmark 10-yr yield settled unchanged at 2.55% after trading as high as 2.59%.
As for the other sectors, losses ranged from less than 0.1% (consumer discretionary) to 1.5% (real estate). The top-weighted technology sector (-0.3%) underperformed with chipmakers showing particular weakness; the Philadelphia Semiconductor Index dropped 1.2%.
Meanwhile, West Texas Intermediate crude futures advanced 0.7% to $63.39 per barrel, a three-year high, after the Department of Energy said U.S. crude inventories declined for the eighth week in a row last week, dropping by 4.9 million barrels. The energy sector, which typically moves in tandem with oil prices, lost 0.1%.
Elsewhere, equity indices in the Asia-Pacific region finished Wednesday on a mixed note with Japan's Nikkei (-0.3%) slipping from a 26-year high. In Europe, the UK's FTSE added 0.2%, but the Euro Stoxx 50 lost 0.4%, breaking its five session winning streak.
Reviewing Wednesday's economic data, which included Import/Export Prices for December, Wholesale Inventories for November, and the weekly MBA Mortgage Applications Index:
Import prices increased 0.1% in December, but were down 0.1% excluding fuel. Export prices, meanwhile, decreased 0.1% and were flat excluding agriculture.
The key takeaway from the report is that it will continue to foment budding inflation concerns, especially since the dollar is weakening, labor markets are tightening, and global growth is improving.
Wholesale inventories increased 0.8% in November (Briefing.com consensus 0.7%) following an upwardly revised 0.4% decline (from -0.5%) in October. Wholesale sales jumped 1.5% in November on top of an upwardly revised 0.8% increase (from 0.7%) in October.
The key takeaway from the report is that the sales increase outpaced the inventory increase by a sizable margin, which is a step in the right direction for wholesalers trying to regain some pricing power.
The weekly MBA Mortgage Applications Index increased 8.3% to follow last week's 2.8% decline.
On Thursday, investors will receive both the Producer Price Index for December (Briefing.com consensus +0.2%) and the weekly Initial Claims report (Briefing.com consensus +248K) at 8:30 AM ET. The December Treasury Budget (Briefing.com consensus -$47.5 billion) will be released at 2:00 PM ET.
Nasdaq Composite: +3.6% YTD
S&P 500: +2.8% YTD
Dow Jones Industrial Average: +2.6% YTD
Russell 2000: +1.6% YTD
Health Care and Financials Keeping Winning Streak Alive
09-Jan-18 16:30 ET
Dow +102.80 at 25385.80, Nasdaq +6.19 at 7163.58, S&P +3.58 at 2751.29
https://www.briefing.com/investor/markets/stock-market-update/2018/1/9/health-care-and-financials-keeping-winning-streak-alive.htm
[BRIEFING.COM] The new year rally continued on Tuesday as stocks hit new records for the sixth consecutive session.
The Dow Jones Industrial Average set the pace, jumping 0.4% to 25385.80, while the S&P 500 and the Nasdaq Composite ticked up 0.1% to 2751.29 and 7163.58, respectively. All three major stock indices posted new record closes, but a late wave of selling left them a step below their best marks of the day. The small-cap Russell 2000 lost 0.1%.
Two of the S&P 500's heaviest sectors--health care and financials--led the charge on Tuesday, bouncing back from a disappointing showing on Monday. The health care sector jumped 1.1% amid broad strength with Dow component Johnson & Johnson (JNJ 144.14, +2.25) climbing 1.6% to a new record high and Boston Scientific (BSX 27.96, +2.15) adding 8.3% after raising its sales guidance for the fourth quarter. Biotech shares also outperformed, sending the iShares Nasdaq Biotechnology ETF (IBB 110.41, +2.04) higher by 1.9%.
Meanwhile, the financial sector rallied 0.7% amid a steepening of the yield curve, which translates to an increase in the spread between what lenders charge on loans and what they pay on deposits. The yield on the benchmark 10-yr Treasury note jumped to 2.55% after settling Monday at 2.48% while the 2-yr yield finished flat at 1.96%.
The rise in longer-dated Treasury yields followed the Bank of Japan's decision to reduce daily purchases of 10-25 year government bonds by 5.0%. Reports that the European Central Bank may terminate its purchase program later this year also helped push yields higher. Asian equities advanced on Tuesday with Japan's Nikkei (+0.6%) closing at a 26-year high while the Euro Stoxx 50 climbed 0.2%, securing its fifth consecutive victory.
Back on Wall Street, the industrial sector finished just a step below health care and financials at the top of the sector standings with a gain of 0.6%. Boeing (BA 318.43, +8.28) jumped 2.7% to a new record high, helping give the Dow an edge over the S&P 500 and the Nasdaq; Boeing is the priciest, and therefore the most influential, component in the price-weighted Dow.
The consumer discretionary sector (+0.1%) also finished in the green, but the seven remaining groups settled in the red. The top-weighted technology space lost 0.3% with semiconductor giant Intel (INTC 43.62, -1.12) losing 2.5%. INTC shares extended early losses after Microsoft (MSFT 88.22, -0.06) said fixes for Intel chip vulnerabilities--which were reported last week--could significantly slow certain servers and personal computers.
Retailers struggled in general, trimming gains from a two-month run, but Target (TGT 69.14, +1.96) had a positive outing after raising its earnings guidance for the fourth quarter. TGT shares added 2.9% while the SPDR S&P 500 Retail ETF (XRT 45.81, -0.49) declined 1.1%.
Outside the equity market, West Texas Intermediate crude futures advanced 1.9% to $62.92 per barrel, closing at a three-year high. The advance came in front of tomorrow morning's weekly crude inventory report from the Energy Information Administration, which has shown a draw in U.S. inventories for seven weeks in a row. The energy sector, which typically moves in tandem with energy prices, lost 0.3%, trimming its 2018 gain to 4.2%.
Elsewhere, representatives from North Korea and South Korea met for the first time in over two years. The two sides agreed to hold joint military talks and North Korea will send a delegation to the Winter Olympics in Pyeongchang, a promising sign for the international community, which has been at odds with North Korea over its nuclear program.
Reviewing Tuesday's economic data, which was limited to the Job Openings and Labor Turnover Survey for November and the NFIB Small Business Optimism Index for December:
The November Job Openings and Labor Turnover Survey showed that job openings decreased to 5.879 million from a revised 5.925 million (from 5.996 million) in October.
The NFIB Small Business Optimism Index for December slipped to 104.9 from 107.5 in November.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET, Import/Export Prices for December at 8:30 ET, and Wholesale Inventories for November (Briefing.com consensus +0.7%) at 10:00 ET.
Nasdaq Composite: +3.8% YTD
S&P 500: +2.9% YTD
Dow Jones Industrial Average: +2.7% YTD
Russell 2000: +1.6% YTD
Stocks Hit Records for Fifth Consecutive Session
08-Jan-18 16:30 ET
Dow -12.87 at 25283.00, Nasdaq +20.83 at 7157.39, S&P +4.56 at 2747.71
https://www.briefing.com/investor/markets/stock-market-update/2018/1/8/stocks-hit-records-for-fifth-consecutive-session.htm
[BRIEFING.COM] Equities ticked higher on Monday, settling in record territory for the fifth session in a row.
The Nasdaq Composite jumped 0.3% to 7157.39 and the S&P 500 advanced 0.2% to 2747.71. The Dow Jones Industrial Average underperformed, finishing lower by 0.1% at 25283.00.
The market struggled for direction following a quiet weekend and ahead of the fourth quarter earnings season, which will kick off on Friday with reports from JPMorgan Chase (JPM 108.50, +0.16) and Wells Fargo (WFC 62.04, -0.71). Stocks opened the session slightly lower and then rose slowly throughout the day.
Nine of eleven sectors finished in positive territory. The lightly-weighted utilities (+0.9%) and real estate (+0.6%) sectors were the top performers, bouncing back from poor showings last week, while the top-weighted technology group (+0.4%) extended its lead for the year; the tech space is up 4.6% year to date.
The energy sector (+0.6%) rallied in the afternoon, helped by an increase in the price of crude oil; West Texas Intermediate crude futures climbed 0.4% to $61.69 per barrel. The industrial sector (+0.4%) also had a positive showing, thanks in part to transports, which pushed the Dow Jones Transportation Average (+0.8%) to a new record high.
On the downside, the heavily-weighted health care (-0.4%) and financials (-0.1%) spaces declined. Within the health care group, biotech shares showed particular weakness, sending the iShares Nasdaq Biotechnology ETF (IBB 108.37, -1.46) lower by 1.3%.
In corporate news, GoPro (GPRO 6.56, -0.96) faced heavy selling after slashing its revenue guidance for the holiday season and announcing its exit from the drone business. GPRO shares held losses of around 30% at the opening bell, but ended the session lower by 12.8%.
Kohl's (KSS 56.90, +2.54) jumped 4.7% after reporting a 6.9% year-over-year increase in same-store sales for November and December while Crocs (CROX 13.23, +1.03) climbed 8.4% after raising its revenue guidance for the fourth quarter.
In the bond market, U.S. Treasuries began the week on a quiet note with the benchmark 10-yr yield closing flat at 2.48%.
Elsewhere, the Euro Stoxx 50 (+0.3%) advanced to a four-month high on Monday, climbing for the fourth session in a row. German Chancellor Angela Merkel's CDU/CSU restarted talks with SPD over the weekend in a last-ditch effort to form a coalition government following months of deadlock.
In the Asia-Pacific region, the major stock indices also moved modestly higher, but Japan's Nikkei was closed for Coming of Age Day.
Monday's lone economic report--the Consumer Credit report for November--showed an increase of 27.9 billion (Briefing.com consensus $18.0 billion). October credit growth was revised to $20.6 billion from $20.5 billion.
On Tuesday, investors will receive the NFIB Small Business Optimism Index and the November Job Openings and Labor Turnover Survey at 6:00 AM ET and 10:00 AM ET, respectively.
InvestmentHouse - Will the Money Stay in the Market (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Stocks rally all week as the large caps, including NASDAQ, lead.
- Jobs Report misses on storm effects, but some very interesting internal
numbers.
- Small caps still looking for the January effect.
- Will the money stay in the market, and if so, will it stay with the large
caps or now move to smaller caps?
Quite the start to 2018, obviously upside and obviously has many stoked
about the stock market's prospects for 2018. Tax reform, a perception the
economy is picking even more speed, and a sense that the Fed cannot be that
aggressive given events such as the fairly large miss in December jobs.
Of course that is a lot of poppycock. The tax reform is definitely a help,
and indeed the economy is already improving on the reduction of regulations;
adding tax incentives will only help. As for the Fed, well, if the economy
really does take off, the Phillips Curve hugging FOMC will hike rates more
than the 3 times anticipated. They will panic as Volcker did in the early
1980's when Reagan's supply side economics were ready to pass. They cannot
help it; it is in their nature. The supposedly most learned economists in
the world cling to their Phillips Curve doctrine despite now decades of
history demonstrating it does not work, the most recent being the past 10
years. Married to ideology versus facts. A lot of that going around these
days.
Even so, one cannot discount the market gains. Impressively strong start to
the year. DJ30 crossed 25,000 while NASDAQ crossed 7,000. DJ30 +576.65
points (2.3%), NASDAQ +233.17 (3.3%). Of course, new highs all around once
again on Friday (less SOX). As with most of the week, however, it was the
large caps, both NYSE or NASDAQ, that led while the small caps brought up
the rear.
SP500 19.16, 0.70%
NASDAQ 58.65, 0.83%
DJ30 220.74, 0.88%
SP400 0.41%
RUTX 0.28%
SOX 0.64%
NASDAQ 100 1.04%
VOLUME: NYSE -14%, NASDAQ -3.5%. NYSE trade slipped back below average
Friday, able to mount above average volume only Thursday. NASDAQ trade fell
as well, but it remained above average as on Wednesday and Thursday. Better
accumulation strength on NASDAQ for the new year: they lagged at the very
end of 2017 and the past week saw some catchup in that regard.
ADVANCE/DECLINE: NYSE 1.5:1, NASDAQ 1.5:1. For a third session breadth
remained at 3:2, just a middle of the road advance. Again, with the small
caps lagging in favor of the fewer large caps, breadth obviously lagged.
With this kind of start, 2018 must be set for a barnburner year. Perhaps.
Mr. Tepper Thursday said that stocks heading into 2018 were 'as cheap' as
they were heading into 2017. Giddy up. You may recall, a few years ago Mr.
Tepper appeared on CNBC one morning and said he was 'concerned' about the
market as it had faded for several weeks and the Fed was being coy. We were
tracking a lot of stocks that set up very good patterns to that point, and
on that day, the day Tepper made that statement, the market bottomed and
those stocks broke higher. The pessimism of many big names turned the
market and we made a lot of money in the ensuing rally.
With all of this positive sentiment, surely the market will rally just as
steadily as it did in 2017, right? Who knows? But I will say that more and
more and more professionals, commentators, and everyday citizens are getting
converted to the idea the market is going to head higher. As discussed
Thursday (and if you didn't read it, do so!), that is always a dangerous
situation that leads to a correction, but the WHEN is the key. Big surges
inevitably revert. As long as leadership looks strong and the policy moves
are correct (as they are thus far), the upside, regardless of how extended,
can continue.
Thus, Friday, again, we were buying very good stocks moving higher, e.g.
AAPL, MMM, SQ, FENG, GRUB. We also took gains on some more positions that
hit targets: CNIT, MSFT, SIFY, YY. Some rally nice gain taken Friday. As
on Tuesday. And Wednesday. Some great gains and more in progress.
Even as we bought more positions as more quality stocks broke higher, we
could not help but thinking about the coming week and whether new money
would continue to push into the market. The first week of a year in an
uptrend of course has money pushed into it; indeed, this was a really strong
week as apparently a lot of the money that LEFT the market in November and
early December came right back in. Remember our discussion of the big names
that publicly announced they had pulled money from the market in August and
September would be forced to put it back in? They did. Same kind of thing
happening right now as that money taken out comes right back in.
After that first week, however, we will see if the money continues to come
in. FAANG took off to the upside again, chips found new buyers after their
selloffs. If the market continues producing new upside groups, the rally
continues. Right now it is doing that as energy has emerged a leader after
several false starts. Metals came around rather rapidly. More leaders
filling in behind those that surge higher keeps the rally going. That means
more money coming into the market, and of course, that takes you back to the
same question: will it continue coming in?
NEWS/ECONOMY
After a lot of buildup to the jobs report, goaded on by the Thursday ADP
report, jobs creation was 32K less than expected. It would appear the
storms had a bit more impact than anticipated. Okay, it was not that great,
but the market still liked it. Just right, I suppose.
Non-farm payrolls: 148K vs 180K exp vs 228K November. 204K/month in Q4
Unemployment rate: 4.1% vs 4.0 exp vs 4.1 Nov
Earnings: 0.3% as expected vs 0.2% prior. 2.5% year/year
Workweek: 34.5 as expected vs 34.5 prior
2017: 2.1M jobs created
Healthcare: 31K
Construction: 30K
Manufacturing: 25K (+196,000 in 2017, jobs that were supposedly never coming
back)
Food and Drink: 25K
Warehousing: 30K
Retail: -20K (-67K in 2017)
And this is said not to include any of the Amazon workers as they don't know
where to put them!
Participation: 62.7% flat for 3 months
U6: 8.1%
Black unemployment rate: 6.8%, -1% year/year, a record low.
Food Stamp recipients: -2 million
Trade balance, November: -$50.5B vs -47.9B expected vs -48.9B Oct.
A 6 month high on the deficit. Why? Imports surged. You will be told that
is horrible by everyone including Trump. But they are wrong. What this
tells you is that the US economy and consumer are going well. We always buy
more imports when the economy is working for us. When US consumers are
confident, they buy foreign goods, they buy domestic goods. Thus, a surge
in imports is a positive economic indication even if it detracts from
overall GDP.
Factory Orders, November: 1.3% versus 1.4% expected versus +0.4% Dec
(from -0.1)
Ex-Transports: +0.8%
Business investment: -0.2%. Disappointing, but consider: the tax reform
debate raged and looked to be on life support. No one was going to commit
big money until that was decided. It is. Expect more. With 100%
expensing, of course there will be more.
Tax reform effect: As of this week, 85 major companies now offering bonuses
or extra compensation to workers.
THE MARKET
CHARTS
The large cap indices launched almost straight up on the week as money
flowed into the big names. Something of an inverse January effect as the
small caps lagged.
NASDAQ: Went with NASDAQ to lead off though any of the big 3 large cap
indices would suffice. NASDAQ jumped off the 20 day EMA test Tuesday and
rallied on a solid expansion of volume back above average. Big names did
the leading as NASDAQ 100 shows even a stronger gain as FAANG jumped back in
on the upside.
SP500: Rocketing upside again after another 20 day EMA test. Volume was up
but less than impressive with only Thursday showing above average trade.
Extended off its 50 day EMA it left behind in early September, it should
correct, but the new money coming in was not about to let it. For now,
playing the move, watching for trouble such as good moves reversing sharply.
Not thus far.
DJ30: Nice surge, quite strong Friday after lagging NASDAQ on the week. As
extended as SP500 above its 50 and 200 day MA's, but its mix of large cap
industrial and tech is enjoying the new money.
SOX: Big moves early week then riding the wave, surpassing the early
November high and now looking at the late November recovery peak at 1342
(closed at 1325.71). A good surge with some good patterns moving higher
along with some not great patterns. New money was obviously pushing it and
that leaves me wondering if SOX can maintain the rebound.
RUTX: Big move Tuesday but after that the small caps followed versus led
the move. For January, that is a bit bass-ackward as the January effect is
where the funds buy smaller cap names as they present the greatest potential
for high percentage gains versus the mega cap stocks. Now, if the money
that chased the big names to start 2018 starts looking elsewhere, the small
caps are primed to move. Indeed, if there is a change next week that could
very well be the change.
SP400: Similar to RUTX, SP400's best gain was early week. New highs each
session but slowed as the week progressed. A bit stronger than RUTX, in the
middle of the large caps and smalls -- as midcaps I guess that is
appropriate.
LEADERSHIP
FAANG: In the lead again as AAPL joined in. FB new high. AMZN, GOOG, NFLX
all new highs. Big buying in these stocks and the latter 3 above are all
building very strong gains for us. Remember, these are not extended
vis- -vis the other large caps: they based all summer into fall and broke
out in late October. They are still relatively early in their moves.
Oil: This time showing staying power. Big names put in good moves and held
them, e.g. CVX, XOM, MRO, HAL, SLB. Kept waiting on HAL to test; it didn't.
Mid-size working as well, e.g. APC. Small also good, e.g. NOG, DNR, PTEN,
CRZO.
Semiconductors: A nice recovery with some good patterns really moving well,
while others rebounded but still have weak patterns. The good: XLNX, MRVL,
MCHP, NVDA. Questionable patterns: LRCX, AMAT, QRVI; SWKS. INTC is trying
to recover from its gap lower on the identified flaws in its chips; we will
see.
Software: CNIT surged but it is a small issue. FFIV was still solid. MSFT
hit our initial target. VMW up nicely on the week. CRM rallying well for
us. Working on it.
Retail: A week were most tested, some struggled after good moves. AAP
surged upside, ROST enjoyed a higher high. TGT testing, COST, TLRD and
others showing the same. Good moves some testing.
Financial: Up midweek, but as usual, it is a fight. C up but cannot seal
the deal on the new upside break. BAC did put in higher highs to end the
week. JPM did but faded back to the 10 day EMA Friday. Working higher but
back and forth day to day.
Machinery/Manufacturing: CAT, DE up again, TEX, CMI testing. Still strong
manufacturing. UTX, HON, EMR all breaking higher. Solid.
China: Some strength returning. YY surged to the initial target. BZUN up
all week for us. CNIT exploded higher through the target. BIDU broke
higher, tested well late. BABA broke upside, pushing for a new high. HTHT
making a nice test of its run; possibility for this week.
MARKET STATS
DJ30
Stats: +220.74 points (+0.88%) to close at 25295.87
Nasdaq
Stats: +58.64 points (+0.83%) to close at 7136.56
Volume: 2.02B (-3.35%)
Up Volume: 1.23B (-90M)
Down Volume: 747.68M (+9.11M)
A/D and Hi/Lo: Advancers led 1.47 to 1
Previous Session: Advancers led 1.5 to 1
New Highs: 269 (-7)
New Lows: 16 (-10)
S&P
Stats: +19.16 points (+0.70%) to close at 2743.15
NYSE Volume: 771.2M (-13.85%)
A/D and Hi/Lo: Advancers led 1.53 to 1
Previous Session: Advancers led 1.45 to 1
New Highs: 252 (-41)
New Lows: 22 (+2)
SENTIMENT INDICATORS
If you have not done so, please read the Thursday report discussion of
sentiment in the Market Summary.
VIX: 9.22; 0.00
VXN: 13.48; -0.49
VXO: 8.56; +0.24
Put/Call Ratio (CBOE): 0.92; +0.10
Bulls and Bears: Trading back and forth in a narrow range at the top what
is historically an extreme level for bulls.
Bulls: 61.9 versus 64.1
Bears: 15.2 versus 15.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 61.9 (1/2/18) versus 64.1
64.1 versus 64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5
versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5
versus 47.1 versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5
versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2
versus 61.8 versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6
versus 60.2 versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3
versus 55.6 versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
Bears: 15.2 versus 15.1
15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4
versus 14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1
versus 19.0 versus 20.2 versus 19.1 versus 19.1 versus 18.3 versus 18.1
versus 17.0 versus 16.2 versus 16.5 versus 16.7 versus 18.6 versus 18.8
versus 18.6 versus 18.3 versus 19.2 versus 18.3 versus 17.1 versus 17.3
versus 17.9 versus 17.9 versus 18.3 versus 17.5 versus 18.3 versus 18.1
versus 17.3 versus 13.75 versus 17.3 versus 16.5 versus 17.5 versus 17.6
versus 16.7 versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4
versus 19.6 versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6
versus 23.5 versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1
versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.476% versus 2.456%. Down early week. Lateral to end it, right in
the range of the past 3 months. The volatile range.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.456%
versus 2.463% versus 2.464% versus 2.405% versus 2.434% versus 2.412% versus
2.474% versus 2.485% versus 2.484% versus 2.501% versus 2.459% versus 2.398%
versus 2.351% versus 2.36% versus 2.403% versus 2.389% versus 2.378% versus
2.34% versus 2.353% versus 2.381% versus 2.363% versus 2.363 versus 2.412%
versus 2.385% versus 2.326% versus 2.329% versus 2.321% versus 2.34% versus
2.354% versus 2.367% versus 2.345% versus 2.37% versus 2.336% versus 2.375%
versus 2.407% versus 2.402% versus 2.34% versus 2.326% versus 2.316% versus
2.32% versus 2.332% versus 2.349% versus 2.358% versus 2.378% versus 2.37%
versus 2.419% versus 2.456% versus 2.435% versus 2.421% versus 2.366% versus
2.383% versus 2.318% versus 2.341% versus 2.30% versus 2.302% versus 2.275%
EUR/USD: 1.20313 versus 1.20756. Another upside week for the euro though
it finished lower on Friday.
Historical: 1.20756 versus 1.20177 versus 1.20573 versus 1.2001 versus
1.1936 versus 1.1936 versus 1.18998 versus 1.18593 versus 1.18628 versus
1.18658 versus 1.18792 versus 1.18408 versus 1.17703 versus 1.1752 versus
1.17798 versus 1.18392 versus 1.17430 versus 1.17652 versus 1.1764 versus
1.17754 versus 1.17990 versus 1.18276 versus 1.18727 versus 1.18983 versus
1.18976 versus 1.18529 versus 1.18489 versus 1.1899 versus 1.19329 versus
1.18148 versus 1.17402 versus 1.1791 versus 1.1787 versus 1.1786 versus
1.1799 versus 1.16443 versus 1.16646 versus 1.16439 versus 1.15871
USD/JPY: 113.058 versus 112.749. Up on the week after testing near the 200
day MA. Range-trading right now.
Historical: 112.749 versus 112.677 versus 112.27 versus 112.690 versus
112.758 versus 113.216 versus 113.208 versus 113.304 versus 113.363 versus
113.334 versus 112.870 versus 112.625 versus 112.619 versus 112.298 versus
112.639 versus 113.555 versus 113.476 versus 113.48 versus 113.473 versus
112.473 versus 112.554 versus 112.442 versus 112.190 versus 112.55 versus
112.102 versus 111.583 versus 111.244
Oil: 61.44, -0.57. Down Friday, but a solid continuation of the break to a
higher high. Bumping at the mid-2015 highs, a key resistance point that
likely hems in oil prices or awhile.
Gold: 1322.30, +0.70. Up all week, continuing 4 week run off the lower low
from early December. A pause after that kind of move is normal.
MONDAY
Again, the big question is whether the money keeps coming in. It poured
into the large caps the past week. As noted in the discussion of the small
caps, it is January and typically the smaller issues get the money. IF
money tapers its bid for the large caps after that first strong week, it
makes sense it would seek the small and midcaps, the more traditional
January buys. Thus, even if the large caps slow, the market can still rise
gratis bids moving to the smaller caps. We will see.
Definitely a strong start to the year and the old adages say that bodes well
for the year. Does not mean there are not fades, pullbacks, or even out and
out corrections. It is all a matter of when and what stocks.
For now the retail are a bit weaker after strong runs, but oil, FAANG,
manufacturing, tech are strong. Will chips continue gathering money their
way? Will others step up and move up, e.g. China, drugs, internet? The
market will need new sectors stepping up to keep the move rallying,
especially if SP500, DJ30 start to correct back after their extended moves
up from the 50 day MA.
We will continue playing the trend, watching how the leaders trade (e.g. any
reversals, stalls), and looking for and picking up good stocks in good
patterns that are not extended, taking what the market gives as the run
continues.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 1736.56
Resistance:
Support:
7,000 from mid-December
6914 is the late November all-time high
The 50 day EMA at 6842
6796 is the early November 2017
The 2016 trendline at 66.60
6641 is the October high
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 200 day SMA at 6394
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2743.15
Resistance:
Support:
The 20 day EMA at 2682
2694 is the mid-December peak
The 50 day EMA at 2637
2597 is the November 2017 high
2549 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
The 200 day SMA at 2490
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low
Dow: Closed at 25,295.87
Resistance:
Support:
24,835 is the mid-December consolidation range
The 20 day EMA at 24,688
24,312
The 50 day EMA at 24,118
23,602 is the early November 2017 high
23,608 is the early November high
22,420 is the September high
The 200 day SMA at 22,194
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
Tech Shares Pace Fourth Consecutive Advance
05-Jan-18 16:30 ET
Dow +220.74 at 25295.87, Nasdaq +58.64 at 7136.56, S&P +19.16 at 2743.15
https://www.briefing.com/investor/markets/stock-market-update/2018/1/5/tech-shares-pace-fourth-consecutive-advance.htm
[BRIEFING.COM] Equities notched new records yet again on Friday, advancing for the fourth session in a row.
The Dow Jones Industrial Average climbed 0.9%, the Nasdaq Composite rose 0.8%, and the S&P 500 jumped 0.7%. All three major U.S. indices finished at new record highs, marking the fourth consecutive record finish for the Nasdaq and the S&P 500 and the third consecutive for the Dow. The Russell 2000 (+0.3%) underperformed but still closed at a new all-time high.
Stocks opened Friday a step above Thursday's closing levels and extended gains in the late afternoon, finishing near their best marks of the day.
The top-weighted technology sector (+1.2%) led Friday's rally, moving into the top spot on the 2018 leaderboard. Within the group, Microsoft (MSFT 88.19, +1.08), Alphabet (GOOGL 1110.29, +14.53), and Facebook (FB 186.85, +2.52) hit new all-time highs, adding between 1.2% and 1.4%. Apple (AAPL 175.00, +1.97) climbed 1.1%.
The health care, consumer discretionary, and materials sectors also had solid showings, adding 0.9% apiece, while the five other advancing sectors ended with gains between 0.1% and 0.7%. The energy sector (unch) was the weakest group as crude oil tumbled from a three-year high. West Texas Intermediate crude futures dropped 0.9% to $61.47 per barrel.
Investors received the Employment Situation Report for December on Friday morning. Job growth was weaker than expected, with nonfarm payrolls increasing by 148,000 (Briefing.com consensus +188,000), while average hourly earnings grew 0.3%--which was in line with the Briefing.com consensus.
Rate-hike expectations remained roughly the same following the release; the CME FedWatch Tool projects that the next rate hike will occur at the March FOMC meeting with an implied probability of 68.1%.
In the bond market, U.S. Treasuries sold off on Friday, pushing yields higher across the curve. The yield on the benchmark 10-yr Treasury note jumped to 2.48% after finishing Thursday at 2.45% while the 2-yr yield jumped one basis point to 1.96%.
Elsewhere, the Euro Stoxx 50 (+1.0%) advanced for the third session in a row following an upbeat batch of economic data, which included the November Eurozone PPI (+0.6% actual vs +0.3% consensus) and Germany's November retail sales (+2.3% actual vs +1.1% consensus).
Stocks in the Asia-Pacific region also had a good day with Japan's Nikkei (+0.9%) settling at a 26-year high for the second consecutive day.
Reviewing Friday's economic data, which included the Employment Situation Report for December, the December ISM Services Index, November Factory Orders, and the November Trade Balance:
Employment Situation Report for December
December nonfarm payrolls increased by 148,000 while the Briefing.com consensus expected an increase of 188,000. The prior month's increase was revised to 252,000 from 228,000. Nonfarm private payrolls rose by 146,000 while the Briefing.com consensus expected an increase of 185,000. The previous month's increase was revised to 239,000 from 221,000.
The unemployment rate stayed at 4.1% (Briefing.com consensus 4.0%). Average hourly earnings increased by 0.3% (Briefing.com consensus +0.3%), while the previous month's increase was revised to 0.1% from 0.2%. The average workweek was reported at 34.5 (Briefing.com consensus 34.5). The previous month's reading was left unrevised at 34.5.
With the labor market believed to be approaching full employment, disappointing headline readings could become more commonplace. This would be indicative of employers struggling to find workers with the right skillset, which in turn should translate into upward pressure on wages.
The ISM Services Index for December declined to 55.9 (Briefing.com consensus 57.6) from an unrevised reading of 57.4 in November.
The key takeaway from the report is that while business activity in the non-manufacturing sector is still expanding, the recent pullback leaves the series near levels seen during the first half of 2017.
The Factory Orders Report for November showed an increase of 1.3% (Briefing.com consensus 1.4%), while the October reading was revised to +0.4% from -0.1%.
The key takeaway from the report is that an uptick in business spending—combined with an upward October revision—should be a supportive factor for GDP growth.
The November trade balance showed a deficit of $50.5 billion (Briefing.com consensus -$47.9 billion). The October deficit was revised to $48.9 billion from $48.7 billion.
The key takeaway from the report is that trade will make for a negative input in fourth quarter GDP models since the real deficit widened to $66.70 billion in November from $65.30 billion in October. The average real trade deficit stood at $62.00 billion in the third quarter.
On Monday, investors will receive just one economic report--November Consumer Credit (Briefing.com consensus $18.0 billion)--which will be released at 3:00 PM ET.
Nasdaq Composite: +3.4% YTD
S&P 500: +2.6% YTD
Dow Jones Industrial Average: +2.3% YTD
Russell 2000: +1.6% YTD
Week In Review: Bang! Off to the Races
The stock market began 2018 with a bang, advancing to new record highs in each of this week's four trading sessions. The Nasdaq Composite jumped 3.4% to 7136.56, the S&P 500 climbed 2.6% to 2743.15, and the Dow Jones Industrial Average rose 2.3% to 25295.87. Markets were closed on Monday in observance of New Year's Day.
This week's rally followed an impressive 2017 campaign for Wall Street, during which the S&P 500 surged nearly 20%, and defused the belief that the new lower tax rates, which took effect on Monday, would invite some profit taking at the start of the new year.
Cyclical sectors, which typically do well when the outlook for the economy is favorable, set the pace this week with the technology (+4.2%), materials (+4.0%), and energy (+3.9%) groups being the top performers.
Energy shares benefited from an increase in the price of crude oil, which touched a three-year high amid anti-government protests in Iran--although the protests weren't expected to have an impact on the country's oil production. Oil prices were also supported by the Department of Energy's weekly inventory report, which showed that U.S. crude stockpiles declined by 7.4 million barrels last week. West Texas Intermediate crude futures gave back some gains on Friday but still ended with a weekly gain of 1.7% at a price of $61.47 per barrel.
Meanwhile, in the top-weighted technology sector, chipmakers had a solid week, bouncing back from some profit taking at the end of 2017; the Philadelphia Semiconductor Index ended the week higher by 5.8%. Intel (INTC) struggled, however, following reports that its chips contain security flaws. INTC shares finished the week lower by 3.1%.
The minutes from the December FOMC meeting were released on Wednesday, showing that most FOMC members backed a continued path of gradual rate hikes. Some members even saw the possibility for more aggressive tightening due to the new tax code, which Fed officials expect will boost consumer and capital spending.
Investors also received the Employment Situation Report for December, which bucked the longstanding trend of above-consensus headline growth and lagging wage growth. Nonfarm payrolls increased less than expected (148,000 actual vs 188,000 Briefing.com consensus), but the November reading was revised to 252,000 from 228,000. Average hourly earnings came in as expected, showing a month-over-month increase of 0.3%.
With the labor market believed to be approaching full employment, disappointing headline readings could become more commonplace. This would be indicative of employers struggling to find workers with the right skillset, which in turn should translate into upward pressure on wages.
The market dialed up its rate-hike expectations following this week's economic data. The CME FedWatch Tool points to the March FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 68.1%, up from 51.7% last week.
Financials Pace Third Consecutive Record Finish
04-Jan-18 16:25 ET
Dow +152.45 at 25075.13, Nasdaq +12.38 at 7077.91, S&P +10.93 at 2723.97
https://www.briefing.com/investor/markets/stock-market-update/2018/1/4/financials-pace-third-consecutive-record-finish.htm
[BRIEFING.COM] Stocks advanced to new records for the third session in a row on Thursday, keeping their perfect 2018 record intact.
The Dow Jones Industrial Average climbed 0.6% to 25075.13, the S&P 500 jumped 0.4% to 2723.99, and the Nasdaq Composite ticked up 0.2% to 7077.91. All three stock indices finished at new all-time highs with the Dow crossing the 25000 mark for the first time. The Russell 2000 also notched a new record, rising 0.2% to 1555.72.
After opening modestly above Wednesday's closing levels, the equity market kept pretty steady through the closing bell.
Nine of eleven sectors advanced on Thursday with gains ranging between 0.1% and 0.9%. The heavily-weighted financial sector (+0.9%) was the top-performing group after trailing the broader market through the first two sessions of the new year. Lenders like JPMorgan Chase (JPM 109.04, +1.54), Bank of America (BAC 30.19, +0.39), Wells Fargo (WFC 62.33, +0.77), and Citigroup (C 75.51, +0.92) added more than 1.0% apiece.
Meanwhile, the energy sector managed to tack on another 0.6%, bringing its 2018 gain to 4.0%, as crude oil extended its three-week rally. West Texas Intermediate crude futures advanced to a fresh three-year high, jumping 0.6% to $61.97 per barrel. Crude futures benefited from the Department of Energy's weekly inventory report, which showed that U.S. crude stockpiles declined by 7.4 million barrels last week--nearly 3 million barrels more than estimates had predicted.
On the downside, the health care sector underperformed, adding just 0.1%, as biotechnology shares gave back a portion of gains registered earlier in the week; the iShares Nasdaq Biotechnology ETF (IBB 109.97, -0.91) lost 0.8%, trimming its week-to-date gain to 3.0%. The lightly-weighted utilities and real estate sectors also struggled, finishing at the bottom of the sector standings with losses of 0.9% and 1.7%, respectively.
In corporate news, Walgreens Boot Alliance (WBA 71.60, -3.91) dropped 5.2% despite reporting better-than-expected earnings and revenues for its fiscal first quarter. L Brands (LB 51.00, -7.16) also had a disappointing outing, as did many retailers, after lowering its profit projections for the holiday season. LB shares ended the session lower by 12.3% while the SPDR S&P Retail ETF (XRT 45.71, -0.27) shed 0.6%.
Elsewhere, equity indices in the Asia-Pacific region finished Thursday on a higher note with Japan's Nikkei (+3.3%) climbing to its best level since 1991. European equities also had a solid day, especially financial names like Deutsche Bank (+2.7%) and Credit Agricole (+4.5%), pushing the Euro Stoxx 50 higher by 1.7%.
Outside the equity markets, U.S. Treasuries sold off modestly, extending losses for the week. The yield on the benchmark 10-yr Treasury note advanced one basis point to 2.45% while the 2-yr yield settled at 1.95% after closing the prior session at 1.93%. Meanwhile, the U.S. Dollar Index slipped 0.3% to 91.60, notching its sixth loss in seven sessions. The greenback lost 0.4% against the euro (1.2068) and 0.3% against the British pound (1.3554).
Reviewing Thursday's economic data, which included the ADP National Employment Report for December and the weekly Initial Claims Report:
The ADP National Employment Report showed an increase of 250,000 in December (Briefing.com consensus 190,000). The November reading was revised to 185,000 from 190,000.
The ADP reading precedes Friday's more influential Employment Situation Report for December (Briefing.com consensus +188K).
The latest weekly initial jobless claims count totaled 250,000, while the Briefing.com consensus expected a reading of 239,000. Today's tally was above the revised prior week count of 247,000 (from 245,000). As for continuing claims, they declined to 1.914 million from a revised count of 1.951 million (from 1.943 million).
Initial claims have held below 300,000 for 148 straight weeks
On Friday, the Employment Situation Report for the month of December will be released at 8:30 AM ET. The Briefing.com consensus expects the report will show the addition of 188,000 nonfarm payrolls, a 0.3% increase in average hourly earnings, and an unemployment rate of 4.0%.
In addition, investors will receive the November Trade Balance (Briefing.com consensus -$47.9 billion) at 8:30 AM ET and both November Factory Orders (Briefing.com consensus +1.4%) and the ISM Services Index (Briefing.com consensus 57.6) at 10:00 AM ET.
Nasdaq Composite: +2.5% YTD
S&P 500: +1.9% YTD
Russell 2000: +1.4% YTD
Dow Jones Industrial Average: +1.3% YTD
Records All Around
03-Jan-18 16:30 ET
Dow +98.67 at 24922.68, Nasdaq +58.63 at 7065.53, S&P +17.25 at 2713.04
https://www.briefing.com/investor/markets/stock-market-update/2018/1/3/records-all-around.htm
[BRIEFING.COM] Wall Street advanced to new record highs for the second day in a row on Wednesday, solidifying a solid start to the new year.
The Nasdaq climbed 0.8% to 7065.53, the S&P 500 jumped 0.6% to 2713.06, the Dow Jones Industrial Average advanced 0.4% to 24922.68, and the Russell 2000 hopped 0.2% to 1552.55. All four indices finished at new all-time highs, with the tech-heavy Nasdaq extending its 2018 gain to 2.4%. The S&P 500 is up 1.5% after the first two sessions of the new year.
Equities opened Wednesday's session just a tick above Tuesday's closing levels, but buyers soon took control, pushing the major stock indices higher through the late morning. The bulls hit pause ahead of the afternoon release of the minutes from the December FOMC meeting, which showed that most members backed a continued path of gradual rate hikes.
Some FOMC members even saw the possibility for more aggressive monetary policy depending on economic growth resulting from the GOP's tax overhaul--which President Trump signed into law two weeks ago. Many Fed officials believe that the tax cuts will boost consumer and capital spending, but there's uncertainty surrounding the magnitude of the growth.
The equity market resumed its upward trend following the minutes, finishing the day at its session high, while the Treasury market gave back some of its opening gains. The yield on the benchmark 10-yr Treasury note finished lower by two basis points at 2.45%, while the 2-yr yield climbed one basis point to 1.93%. Yields move inversely to prices.
Energy shares led the rally on Wall Street as West Texas Intermediate crude futures climbed 2.1% to $61.63 per barrel--which marks their best close since December 2014. Anti-government protests in oil-rich Iran helped fuel the commodity's advance, even though the demonstrations aren't expected to affect production. The S&P 500's energy sector added 1.5%.
The heavily-weighted technology and health care sectors were the next-best performing groups, adding 1.1% and 1.0%, respectively, while the other advancing sectors added between 0.1% and 0.7%. Within the tech space, chipmakers had another solid day overall, extending the PHLX Semiconductor Index's week-to-date gain to 4.5%, but Intel (INTC 45.26, -1.59) did not.
INTC shares lost 3.4% in reaction to reports that a design flaw in Intel's processor chips has forced a significant redesign of kernels for the Windows and Linux operating systems. Intel issued a statement refuting the claims in the late afternoon, which helped INTC shares pare some of their losses before the closing bell.
Only three of eleven sectors finished the midweek session in the red--consumer staples (-0.1%), utilities (-0.8%), and telecom services (-2.2%)--but their impact was modest as they comprise just a little more than 10.0% of the broader market combined.
Elsewhere, the Euro Stoxx 50 (+0.6%) ended a six-session losing streak and the major indices in the Asia-Pacific region also finished in the green. China's Shanghai Composite (+0.6%) paced the advance in Asia while Japan's Nikkei remained closed for a holiday.
Reviewing Wednesday's economic data, which included the ISM Manufacturing Index for December, Construction Spending for November, and the weekly MBA Mortgage Applications Index:
The ISM Index for December rose to 59.7 from an unrevised reading of 58.2 in November, while the Briefing.com consensus expected a reading of 58.0.
The key takeaway from the report is that growth in December was fueled by increases in eight out of ten index categories with New Order growth (+5.4 to 69.4) leading the way. The December increase leaves the index not far from its 2017 high of 60.8 that was recorded in the September reading.
The Construction Spending report for November increased 0.8%, while the Briefing.com consensus expected an increase of 0.7%. The prior month's increase was lowered to 0.9% from 1.4%.
The key takeaway from the report--and the downward revision to the October figure--is that construction spending is not sending signals pointing to notable acceleration in overall GDP growth.
The weekly MBA Mortgage Applications Index decreased 2.8% to follow last week's 4.9% decline.
On Thursday, investors will receive two economic reports--ADP Employment Change for December (Briefing.com consensus +190K) and weekly Initial Claims (Briefing.com consensus 239K). The two reports will be released at 8:15 AM ET and 8:30 AM ET, respectively.
Nasdaq Composite: +2.4% YTD
S&P 500: +1.5% YTD
Russell 2000: +1.1% YTD
Dow Jones Industrial Average: +0.8% YTD
2018 Gets Underway with Another Record Finish
02-Jan-18 16:20 ET
Dow +104.79 at 24824.01, Nasdaq +103.51 at 7006.90, S&P +22.18 at 2695.79
https://www.briefing.com/investor/markets/stock-market-update/2018/1/2/2018-gets-underway-with-another-record-finish.htm
[BRIEFING.COM] U.S. equities began 2018 on a positive note, jolted by a sense of optimism for the new year.
The major stock indices mostly reclaimed the losses registered ahead of the extended New Year's weekend, with the tech-heavy Nasdaq (+1.5%) settling above the 7000 mark for the first time ever. The S&P 500 (+0.8%) also finished at a new record high, while the Dow Jones Industrial Average (+0.4%) underperformed.
Beneath the eye-catching headlines of new all-time highs, Tuesday's session was rather dull as trading volume remained relatively light following the holidays; just 815 million shares changed hands at the New York Stock Exchange. Equities registered most of their gains at the opening bell and, outside an uptick in the final minutes, trended sideways for the rest of the day.
Advancing stocks outnumbered declining stocks by 1.6 to 1, and, more importantly, the size of the gains easily outweighed the magnitude of the losses. The consumer discretionary, technology, health care, energy, and materials sectors--which comprise around 60% of the broader market combined--climbed more than 1.0% apiece.
Meanwhile, the consumer staples, utilities, and real estate groups--which make up just 14% of the broader market combined--lost between 0.6% and 0.9%. The heavily-weighted financial sector also finished in the red, but its loss was modest at 0.1%.
Chipmakers had a solid day, bouncing back from some profit taking at the end of 2017; the PHLX Semiconductor Index jumped 2.8%. Names like Advanced Micro (AMD 10.98, +0.70) and Micron Technology (MU 43.67, +2.55) were among the top performers, adding 6.8% and 6.2%, respectively.
Retailers also put together a positive performance, evidenced by the 1.8% increase in the SPDR S&P Retail ETF (XRT 46.01, +0.83). Target (TGT 67.63, +2.38) tacked on 3.7% amid speculation that Amazon (AMZN 1189.01, +19.54) could make a bid for the big-box retailer sometime this year.
Elsewhere, the Euro Stoxx 50 (-0.5%) posted its sixth consecutive loss despite an in-line reading for the December Eurozone Manufacturing PMI (60.6). Conversely, equity indices in the Asia-Pacific region finished Tuesday on a mostly higher note, with Hong Kong's Hang Seng (+2.0%) pacing the advance.
Outside the equity markets, U.S. Treasury yields climbed across the curve, with the benchmark 10-yr yield jumping six basis points to 2.47%, and West Texas Intermediate crude futures held steady at $60.36 per barrel as anti-government protests in Iran continued. The U.S. Dollar Index tumbled 0.5% to 91.55, hitting a three-month low.
Investors did not receive any economic data on Tuesday, but they will receive several economic reports on Wednesday, including the weekly MBA Mortgage Applications Index at 7:00 ET and both the ISM Manufacturing Index for December (Briefing.com consensus 58.0) and Construction Spending for November (Briefing.com consensus +0.7%) at 10:00 ET.
In addition, the minutes from the December FOMC meeting will cross the wires at 14:00 ET, and December auto and truck sales will be released throughout the day.
Nasdaq Composite: +1.5% YTD
Russell 2000: +0.9% YTD
S&P 500: +0.8% YTD
Dow Jones Industrial Average: +0.4% YTD
Finishing 2017 With a Whimper
29-Dec-17 16:25 ET
Dow -118.29 at 24719.22, Nasdaq -46.77 at 6903.39, S&P -13.93 at 2673.61
https://www.briefing.com/investor/markets/stock-market-update/2017/12/29/finishing-2017-with-a-whimper.htm
[BRIEFING.COM] The trading day is done and the year is too. The former wasn't too special, but the latter was. The major indices closed today with losses ranging from 0.5% to 0.9%, unable to live up to the bullish bias that prevailed in pre-market trading.
Today's losses, though, won't ruffle too many feathers considering the major indices registered gains this year ranging from 13.1% (Russell 2000) to 28.2% (Nasdaq Composite).
Friday's action was over early for the bulls as opening gains quickly evaporated and the indices settled back into negative territory not too far from where they closed Thursday's session.
Range-bound and featureless action predominated throughout the day as a lack of concerted leadership, a lack of corporate news, and a lack of economic data succeeded in keeping market participants disinterested for most of the session.
There was some excitement in the final hour of trading, though, which has become commonplace for this stock market.
Unlike Thursday, the final hour featured a wave of broad-based selling interest over the last 30 minutes that knocked the indices out of their range-bound stupor and left them at their worst levels of the day when the final bell of 2017 rang.
The losses were led by the health care (-0.7%), financial (-0.7%), consumer discretionary (-0.7%), and information technology (-0.6%) sectors, all of which were among the market's best-performing sectors for 2017.
There wasn't a news catalyst for the selling, which is apt to be construed as a defensive, profit-taking move in front of the three-day weekend. There is apt to be some chatter, too, that it could reflect a little defensive posturing heading into the first week of the new year when it is thought investors might be inclined to secure long-term capital gains after deferring them at the end of 2017 as the tax bill was being worked out.
We'll know soon enough, but a little selling late today won't spoil an excellent year. The S&P 500, which was up 20% for the year around 3:20 p.m. ET today, closed 2017 up 19.4% (before dividends).
Nasdaq Composite: +28.2% YTD
Dow Jones Industrial Average: +25.2% YTD
S&P 500: +19.4% YTD
S&P Midcap 400 Index: +14.5% YTD
Russell 2000: +13.1% YTD
Week in Review: Not Missing Much
After four days and 26 total hours of trading, the S&P 500 settled the holiday-shortened week down 0.4% -- and only because of a sell-off in the last 30 minutes of trading on Friday.
The remarkable thing is that there was a 19-point variance between the high and low for the week, both of which were logged on Friday. In other words, it was an extremely range-bound market that lacked conviction on the part of buyers and sellers -- until the last 30 minutes on Friday.
That lack of conviction was plain to see in the volume totals at the NYSE, which were among the lightest all year.
It was no surprise as this is a popular vacation week, and with the stock market having done so well already in 2017, many participants undoubtedly felt comfortable following pursuits that didn't include buying or selling stocks.
It is fair to say they didn't miss much.
The corporate news was very limited. The headline item for the week in that respect included Apple (AAPL), which declined 3.3% and closed just below its 50-day simple moving average during a week when many other stocks didn't move much.
Apple's difficulties stemmed from press reports on Tuesday which highlighted some analysts' concerns about iPhone X demand possibly being weaker than expected in the company's fiscal first quarter. Separately, Apple had some PR issues to deal with, which subsequently led to an apology from the company pertaining to the battery performance of its older iPhone models.
It would be remiss not to add that AAPL had a great 2017, increasing 46%, so it isn't unreasonable to think it might have been subjected to some profit taking at year end anyway. The aforementioned headlines, though, helped in that regard.
The livelier trading action took place outside the stock market.
Bitcoin was the picture of volatility; the 10-yr Treasury yield came in eight basis points to 2.41%; oil prices increased 3.1% to $60.27 per barrel, marking their highest close since 2015; gold prices jumped 2.4% to $1309.20/troy oz.; and the U.S. Dollar Index slumped 1.1% to 92.30.
Economic data was limited and on the mixed side, yet the Chicago Purchasing Managers Index for December created some fanfare on Thursday with its best print (67.6) since March 2011, led by a three-and-a-half year high for the New Orders Index and a 34-year high for the Production Index.
Within the stock market, the lightly-weighted real estate sector topped the list of winners with a 1.3% gain for the week. Price returns for the remaining ten sectors ranged from -1.0% (information technology) to 0.3% (utilities).
As a reminder, the stock and bond markets will be closed on Monday for the New Year's Day holiday and will re-open on Tuesday.
Happy New Year!
Dow Grinds Its Way to Another Record High
28-Dec-17 16:25 ET
Dow +63.21 at 24837.51, Nasdaq +10.82 at 6950.16, S&P +4.92 at 2687.54
https://www.briefing.com/investor/markets/stock-market-update/2017/12/28/dow-grinds-its-way-to-another-record-high.htm
[BRIEFING.COM] It was a literal grind for the major indices Thursday, which held to extremely tight trading ranges throughout the day, clinging to modest gains that got extended slightly in the final hour of trading.
When it was all said and done, the major indices closed up between 0.2% and 0.3%.
There wasn't much trading excitement in the stock market because there was a dearth of market-moving news, as well as a dearth of participants. For the third day running, extremely light trading volume reflected the fact that many market participants have checked out until the new year.
Just 527 million shares traded at the NYSE, which was the lowest total this week and the lowest for a late-December session in two years.
Much of today's hoopla revolved around bitcoin, which slumped as much as 11% overnight on the news that South Korea is going to instill new regulations that ban anonymous trading accounts and enable authorities to close exchanges when deemed necessary.
Beyond that, the moves in the stock market were incremental. Ten out of 11 S&P 500 sectors closed the day higher, yet their gains ranged from 0.09% (health care and energy) to 0.52% (telecom services).
The lone loser was the consumer staples sector, which declined 0.19%.
The Dow Jones Transportation Average (-0.4%) underperformed after trucking company J. B. Hunt (JBHT 115.24, -0.23, -0.2%) disappointed with some fourth quarter earnings guidance. J.B. Hunt and the transportation average, however, both closed well off their lows of the day thanks to the late burst of buying interest, which led to the 71st record-high close for the Dow Jones Industrial Average this year.
Separately, natural gas futures moved up sharply ($2.91, +$0.18, +6.6%) as temperatures moved down sharply across the Midwest and Northeast, stoking increased heating demand. Natural gas prices were also helped by a report from the government showing a net decrease of 112 billion cubic feet of working gas in storage for the week ending December 22.
Oil prices, which had been lower for most of the day despite a report showing a 4.6 million barrel drawdown in crude oil stockpiles, reversed course late and settled the day 0.4% higher at $59.85 per barrel.
Reviewing Thursday's economic data, which included the initial claims, Chicago PMI, and advance reports for international trade in goods and wholesale inventories:
Initial claims for the week ending December 23 were 245,000 (Briefing.com consensus 238,000), unchanged from the prior week, while continuing claims for the week ending December 16 increased by 7,000 to 1.943 million.
Initial claims have held below 300,000 for 147 straight weeks.
The MNI Chicago Business Barometer, otherwise referred to as the Chicago Purchasing Managers Index, surged to 67.6 in December (Briefing.com consensus 61.9) from 63.9 in October.
The key takeaway from the report is that manufacturing conditions in the Chicago Fed region are strong, as the December reading is the highest since March 2011.
The advance report for international trade in goods for November showed a widening in the deficit to $69.7 billion from -$68.1 billion in October
The advance report for wholesale inventories for November showed a 0.7% increase on the heels of a 0.4% decline in October
There is no economic data of note scheduled for release on Friday.
Nasdaq Composite: +29.1% YTD
Dow Jones Industrial Average: +25.6%
S&P 500: +20.0% YTD
S&P Midcap 400 Index: +15.1%
Russell 2000: +14.1%
Still Waiting on Santa
27-Dec-17 16:25 ET
Dow +28.09 at 24774.30, Nasdaq +3.09 at 6939.34, S&P +2.12 at 2682.62
https://www.briefing.com/investor/markets/stock-market-update/2017/12/27/still-waiting-on-santa.htm
[BRIEFING.COM] There was little change in the stock market on Wednesday, which was basically the case throughout the session. The major indices were confined to tight trading ranges, vacillating within close proximity to Tuesday's closing levels.
The lack of conviction was consistent with Tuesday's trading, which was one of the lightest volume days of the year at the NYSE. Volume was a little heavier today at 548 million shares, yet it was still far below "normal" levels as vacation schedules continued to be fuller than trading desks.
That is nothing unusual this time of year, yet it will be noticed nonetheless by veteran market watchers that the Santa Claus rally period, which includes the last five trading days of the year and the first two trading days of the new year, has been slow to get going.
That period is typically a good period for the stock market. According to the Stock Trader's Almanac, it has produced an average gain of 1.5% for the S&P 500 since 1950. Through the first three days of this year's Santa Claus rally period, the S&P 500 has slipped 0.07%.
There is still time for Santa to show, but it is fair to say that it will be a condensed showing if he does.
Today's sector returns were certainly condensed, as there wasn't a single sector that increased, or decreased, more than 0.4%.
The best-performing sectors were real estate (+0.4%) and utilities (+0.4%), which found some support from a big drop in long-term rates. In fact, the Treasury market is where most of today's trading excitement was found.
The yield on the 10-yr note fell six basis points to 2.41% while the yield on the 30-yr bond dropped six basis points to 2.75%. There were gains, though, across the yield curve, but a curve flattening trade prevailed as the 2-yr note yield slipped only two basis points to 1.88%.
There wasn't a telling news item for the strength in the Treasury market. The Consumer Confidence report for December was a bit weaker than expected, yet that wasn't enough to account for the sizable increase in Treasury prices; moreover, the $34 billion 5-year note auction was weak, which wouldn't be a rally factor.
The suspected tailwind was a drop in European bond yields, a likely trigger for an interest-rate differential trade that has tamped down long-term rates all year despite improving economic activity and three rate hikes from the Federal Reserve.
It is possible, too, that safe-haven trading was in play going into year end, which will feature another three-day weekend.
Back to the stock market, the energy sector (-0.3%) was the biggest loser today, falling victim to some profit taking that was facilitated by a 0.6% drop in oil prices ($59.64, -$0.33), which hit their highest level since mid-2015 on Tuesday.
The consumer discretionary sector dipped 0.2%, weighed down by weakness in many of the retail stocks. The latter also fell victim to profit taking after staging a big rally in recent weeks. To wit, Macy's (M 25.64, -1.21) declined 4.5% after gaining as much as 56% from its November 7 low.
Reviewing this morning's economic data, which included the Consumer Confidence report for December and the Pending Home Sales Index for November:
The Conference Board's Consumer Confidence Index for December dropped to 122.1 (Briefing.com consensus 128.0) from a downwardly revised 128.6 (from 129.5) in November, which marked a 17-year high.
The key takeaway from the report is that consumers had a less optimistic outlook for business and job prospects in coming months, which is a bit surprising given the advertised benefits of tax reform. Overall, though, consumer confidence remains strong.
The Pending Home Sales Index increased 0.2% in November (Briefing.com consensus -0.7%) following an unrevised 3.5% increase in October
Wednesday's will include the weekly initial claims report and the advance reports for international trade in goods and wholesale inventories for November.
Nasdaq Composite: +28.9% YTD
Dow Jones Industrial Average: +25.3% YTD
S&P 500: +19.8% YTD
S&P Midcap 400 Index: +14.8% YTD
Russell 2000: +13.8% YTD
Lacking Interest
26-Dec-17 16:25 ET
Dow -7.85 at 24746.21, Nasdaq -23.71 at 6936.25, S&P -2.84 at 2680.50
https://www.briefing.com/investor/markets/stock-market-update/2017/12/26/lacking-interest.htm
[BRIEFING.COM] It was a lackadaisical day of trading on Wall Street as many participants clearly found better things to do the day after Christmas than buy or sell stocks. The trading proof of point was in the volume, which totaled just 528 million shares at the NYSE versus 650 million shares last Tuesday and 723 million shares the Tuesday before that.
The light participation was not a surprise as this is a popular vacation day (and week). Major bourses in Europe were closed for Boxing Day, which contributed to the light volume.
There wasn't much news driving the market narrative, which revolved around the following:
Weakness in Apple (AAPL 170.57, -4.44, -2.5%) and many of its suppliers in the wake of press reports highlighting some analysts' concerns about iPhone X demand possibly being weaker than expected in the fiscal first quarter, which encompasses the holiday selling season
A nice move by many retail stocks after Mastercard Spending Pulse reported retail sales, excluding autos, rose at their strongest pace (+4.9%) since 2011 from November 1 through Christmas Eve. The SPDR S&P Retail ETF (XRT 46.03, +0.52, +1.1%) reflected the relative strength of the retail stocks while Amazon.com (AMZN 1176.76, +8.40, +0.7%), which said it had its best holiday season ever, reflected the upbeat sales report.
The rise in oil prices ($59.90, +$1.43, +2.5%), which hit their highest level since mid-2015, spurred on by reports of a pipeline explosion in Libya that will curtail about 90,000 barrels per day from the OPEC nation. That move led to some concurrent strength in the energy sector (+0.8%), which was the market's best-performing sector on Tuesday.
The huge reversal in bitcoin, which hit $16,000 after trading below $11,000 last Friday
For the most part, the broader market found itself pinned down by Apple's weakness and the weight of losses in the information technology (-0.7%) and financial (-0.5%) sectors, which are its two most heavily-weighted sectors.
Some curve flattening pressured the financials, yet that was more of an excuse for the weakness on a day when there wasn't a lot of substantive news to account for the price action.
The yield on the 2-yr note bumped up one basis point to 1.90% following a weak $26 billion 2-yr note auction; meanwhile, the yield on the benchmark 10-yr note slipped two basis points to 2.47%.
The S&P Case-Shiller Home Price Index for October was the only economic release of note. It showed home prices in 20 major metropolitan cities increased 6.4% year-over-year (Briefing.com consensus +6.3%).
Wednesday's slate of data will feature the weekly Mortgage Applications Index at 7:00 a.m. ET, the Consumer Confidence report for December at 10:00 a.m. ET, and the Pending Home Sales report for November at 10:00 a.m. ET.
Nasdaq Composite: +28.9% YTD
Dow Jones Industrial Average: +25.2% YTD
S&P 500 +19.7% YTD
S&P Midcap 400 Index: +14.8% YTD
Russell 2000 +13.8% YTD
InvestmentHouse - Waiting for Santa to Bring His Rally (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Indices test nicely, waiting for Santa to bring his rally next week.
- SP500, DJ30 are extended, but this action does not indicate near term
topping.
- Still many leaders testing near support and looking good if the bids
return.
- Fund outflows jump post-tax passing and the market weathers it with a
modest test. The question is whether the outflows continue.
- Many plays are ready to move if they get the nod.
The stock market is apparently waiting on Santa to show up and bring a Santa
Clause rally. After gapping nicely upside Monday, the balance of the week
was testing. With outflows post-tax reform vote at $14.5B from equity funds
there is justification to the argument that the action showed 'smart money'
leaving the market. Hey, we took some profits as well based upon a specific
set of plans.
SP500 -1.23, -0.05%
NASDAQ -5.40, -0.08%
DJ30 -28.23, -0.11%
SP400 -0.03%
RUTX -0.27%
SOX -0.05%
NASDAQ 100 -0.12%
That said, the Tuesday to Friday action was not in itself damaging to the
market. Lower volume, quite modest fades by both the indices and leading
stocks. Sure DJ30 and SP500 are quite extended, but the action this week
did not suggest they are rolling over. That may still come as the market
moves past the yearend good tidings, and we are very cognizant of that, but
you can only take the market that presents itself.
Even so, as discussed earlier this week, while large caps may find the need
to fade and consolidate more than these past four sessions, other areas of
the market are still fresh and can easily make new moves. Indeed, even the
FAANG and some other NASDAQ large names can still move: they based all
summer and broke out in late October. We still own some of these (GOOG,
INTC, AMZN) and are looking at new positions on them as the case may be.
Money definitely flowed out as the flow indicators state, but if this is as
bad as it gets, that was nothing. The key is whether the money continues to
leave or if it was just some readjustment. If net outflows continue, stocks
of course will struggle more to find a floor. Again, thus far the outflows
resulted in only modest, low volume tests, indeed very normal tests back to
the 10 day EMA for the indices and for leading stocks.
TUESDAY
We have a lot of great plays on the report, plays that are ready to go if
they get the nod from investors and traders. AAPL, AMZN, BIDU, CAVM, CUTR,
FFIV, GOOG, PTN, PTLA -- lots that look really good, and still more not
mentioned. If they show the moves we want to play the moves. Also, love
the pullback on ROKU and we are putting on a new play on it for next week.
NEWS/ECONOMY
Friday added to the long list of the week's data. Again it was good in some
respects, not so good in others. On a week that saw regional PMI's beat
expectations and housing sales surge, other reports missed, even if
slightly.
Durable Goods, preliminary November: 1.2 vs 2.1% exp vs -0.4 prior
(from -1.2)
Ex-Transports: -0.1 vs +0.4 exp vs 1.3 prior (up from 0.4%)
Business investment: -0.1 vs +0.8 October (from 0.3%). That was the
largest drop since 2016. At least the revision from October helped offset
the miss.
Personal Income, Nov: 0.3 vs 0.4 exp vs 0.4 October
Personal Spending: 0.6 vs 0.4 exp vs 0.2 Oct (from 0.3)
New Home Sales, Nov: +17.5%, the largest in crease in 25 years. Well, I
suppose those people needed some money to finance the purchases so that
explains the outflows from the market? Good gains, lock in some profits to
pay for the new digs.
Tax reform effects: More companies announcing bonuses, etc.
BAC to pay $1K bonuses to 145K employees. BBT increases its minimum pay to
$15/hour.
Expect to see a LOT more of this next week.
Also, AMGN said it will face a 6% tax issue with the new code. Expect to
see these announcements as well.
Bitcoin: Crashed through 14K overnight, then through 13K. It held, however,
at the 38% Fibonacci retracement of the prior move and started to bounce
late in the session. Ah, some trading parameters are holding in its action.
We are watching and looking for opportunities to trade this, and once
comfortable, we will share the trades with you of course.
THE MARKET
CHARTS
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
SP500/DJ30: Both are about the same in terms of extension with the Dow a
bit more than SP500. Both gapped higher Monday to new highs, both tested
the gain the rest of the week, showing doij at the 10 day EMA. Modest,
lower volume selling, holding near support. Thus far not flashing any
warning signs based on their trading action. That is different from their
technical position that is, as noted, extended with 4 and 5 runs up the
short term moving averages after the last 50 day EMA test.
NASDAQ/NASDAQ 100: Both are quite similar. They too gapped upside to highs
Monday then faded the move to the 10 day EMA through Friday, showing tight
doji there to close the week. NASDAQ on its fourth run up the 10/20 day
EMA, testing this week after its upside gap. No danger signals based upon
the trading action with the stronger volume rise, lower volume fade.
SP400/RUTX: Both the midcaps and small caps gapped higher Monday to the
prior highs from late November/early December and stopped there. Lateral
slides to Friday, not the fade of the large cap indices. Tax sensitive,
whether they can make good, solid breaks to new highs is important for the
market overall as that would indicate these domestically economic sensitive
stocks are building in more gains in the future.
SOX: You can argue SOX has put in an ABCD downside pattern off the late
November/early December selling. That would suggest a leg lower off this
last move into Wednesday that was tested Thursday and Friday. If you step
back a bit more, you see the big run from September to late November, and
the recent action as working on an ABCD upside pattern. That would suggest
another downside leg to undercut the early December low to around 1180 to
form a D point. That gives you the drop from the shorter downside ABCD, and
it sets up the larger upside ABCD that would indicate a rally back up toward
the prior highs. Either way you slice it, the prognosis would be weakness
off this last move higher. That said, SOX' action in the week was solid for
the upside: gapped through the 50 day MA, rallied some more, tested the 50
day MA with a doji Friday. While the ABCD patterns make sense, you have to
watch whether SOX goes rogue and just rallies back up.
LEADERSHIP
Oil: After a great upside week Friday was a day of rest. For some. CVX,
MRO, CRZO, PTEN, DNR all more or less took a day off. Those are our current
positions, and remember, we are watching HAL for a test of its break through
the 200 day SMA that we can use. APC added another 1.9% Friday.
FAANG: Still some very nice tests ongoing. AAPL is working laterally over
the 10 day EMA. AMZN testing the 20 day EMA. GOOG showing a very nice
pullback near the 10 day EMA that we were wanting to see. FB showing a doji
at the 50 day EMA. NFLX is still a mess technically.
Financial: Friday was somewhat mushy, but on the week these stocks closed
better after some volatility on some such as GS. BAC, JPM were back and
forth as well, but were trending upside all week.
Chips: Still a very mixed group with the struggling side such as LRCX,
AMAT, XLNX. The other side is not bad, just not moving outside of INTC:
CAVM, MRVL, CCMP, SIMO. These are good setups, however, and could surge.
Drugs/Biotechs: Big names struggling, e.g. CELG, BIIB. Smaller groups look
very good. PTLA set up well. ENDP, IMGN still solid. EXEL blasted higher,
never tested; waiting to see if it tests this coming week.
Retail: Same story with good tests, e.g. ULTA, COST, and good moves
continuing, e.g. TLRD, TGT, ROST, AAP.
Machinery/Manufacturing: CAT still on an upside tear. DE as well. Man.
Manufacturing testing a bit, e.g. HON, though EMR just hit a higher high.
Transports: Truckers rebounded right back up to higher highs, e.g. KNX,
WERN, ODFL. Airlines holding their gains on the week though pausing on the
busy travel day.
China: A few still look good. YY climbing up the 10 day EMA though off a
bit Friday. BIDU looks really good -- still -- just looking for the move.
NTES testing its great move on the week.
MARKET STATS
DJ30
Stats: -28.23 points (-0.11%) to close at 24754.06
Nasdaq
Stats: -5.40 points (-0.08%) to close at 6959.96
Volume: 1.54B (-14.92%)
Up Volume: 680.07M (-369.93M)
Down Volume: 813.91M (+73.84M)
A/D and Hi/Lo: Decliners led 1.3 to 1
Previous Session: Advancers led 1.61 to 1
New Highs: 82 (-23)
New Lows: 36 (-1)
S&P
Stats: -1.23 points (-0.05%) to close at 2683.34
NYSE Volume: 598.6M (-23.24%)
A/D and Hi/Lo: Advancers led 1.02 to 1
Previous Session: Advancers led 1.55 to 1
New Highs: 137 (-55)
New Lows: 26 (-16)
SENTIMENT INDICATORS
VIX: 9.90; +0.28
VXN: 12.54; -0.11
VXO: 8.45; +0.12
Put/Call Ratio (CBOE): 0.95; +0.11
Bulls and Bears: Pretty large drop though still easily over 60 for the
bulls. That is still in the overly optimistic range and of course the surge
Friday will bring them around again to the upside. This is a warning
indication, but not a great timing device.
Bulls: 61.9 versus 64.2
Bears: 15.2 versus 15.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 61.9 versus 64.2
64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5 versus 62.3
versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1
versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0
versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5
versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7
versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5
versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8
versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
Bears: 15.2 versus 15.1
15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1
versus 15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2
versus 19.1 versus 19.1 versus 18.3 versus 18.1 versus 17.0 versus 16.2
versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3
versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9
versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75
versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6
versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6
versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7
versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1
versus 24.3
OTHER MARKETS
Bonds: 2.485% versus 2.484%. Crashed on the week, holding near the 200 day
SMA just as it did in late October and it managed to recover from there.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.484%
versus 2.501% versus 2.459% versus 2.398% versus 2.351% versus 2.36% versus
2.403% versus 2.389% versus 2.378% versus 2.34% versus 2.353% versus 2.381%
versus 2.363% versus 2.363 versus 2.412% versus 2.385% versus 2.326% versus
2.329% versus 2.321% versus 2.34% versus 2.354% versus 2.367% versus 2.345%
versus 2.37% versus 2.336% versus 2.375% versus 2.407% versus 2.402% versus
2.34% versus 2.326% versus 2.316% versus 2.32% versus 2.332% versus 2.349%
versus 2.358% versus 2.378% versus 2.37% versus 2.419% versus 2.456% versus
2.435% versus 2.421% versus 2.366% versus 2.383% versus 2.318% versus 2.341%
versus 2.30% versus 2.302% versus 2.275%
EUR/USD: 1.18628 versus 1.18658. Setting up for another move higher
against the dollar.
Historical: 1.18658 versus 1.18792 versus 1.18408 versus 1.17703 versus
1.1752 versus 1.17798 versus 1.18392 versus 1.17430 versus 1.17652 versus
1.1764 versus 1.17754 versus 1.17990 versus 1.18276 versus 1.18727 versus
1.18983 versus 1.18976 versus 1.18529 versus 1.18489 versus 1.1899 versus
1.19329 versus 1.18148 versus 1.17402 versus 1.1791 versus 1.1787 versus
1.1786 versus 1.1799 versus 1.16443 versus 1.16646 versus 1.16439 versus
1.15871
USD/JPY: 113.304 versus 113.363. Building for another move up, testing the
early week rally.
Historical: 113.363 versus 113.334 versus 112.870 versus 112.625 versus
112.619 versus 112.298 versus 112.639 versus 113.555 versus 113.476 versus
113.48 versus 113.473 versus 112.473 versus 112.554 versus 112.442 versus
112.190 versus 112.55 versus 112.102 versus 111.583 versus 111.244
Oil: 58.47, +0.11. Approaching the late October recovery high.
Gold: 1278.80, +8.20. Cleared the 200 day SMA and the 50 day MA's on the
way back up from the sharp selloff into the second week of December.
Coasting into Christmas
22-Dec-17 16:25 ET
Dow -28.23 at 24754.06, Nasdaq -5.40 at 6959.96, S&P -1.23 at 2683.34
https://www.briefing.com/investor/markets/stock-market-update/2017/12/22/coasting-into-christmas.htm
[BRIEFING.COM] Friday's trading session for the stock market was a forgettable one and that's exactly how most market participants probably hoped it would be. There were no fireworks ahead of Monday's Christmas holiday, which will leave capital markets closed for a three-day stretch. The major indices dipped at the open and then held in tight trading ranges just shy of their starting levels over the course of the trading day.
The fireworks -- or the bombs really -- were reserved for bitcoin. It slumped below $11,000 today, which in itself doesn't mean much until one understands that was more than 30% below where it traded most of Thursday.
The collapse in bitcoin prices was not driven by any news, yet the collapse itself was the news. Buyers eventually emerged to repair a good portion of the damage, but it wasn't completely fixed. Bitcoin was last trading around $14,000 as of this writing.
The trading volume in the stock market was predictably low as many participants had clearly checked out for the day. NYSE volume totaled just 599 million shares.
Overall, there wasn't much conviction on the part of buyers or sellers. The final standings didn't show a single sector gaining, or losing, more than 1.0%.
The best-performing sector was real estate (+0.7%), which also happened to be one of the worst-performing sectors for the week (-2.3%), suggesting it garnered some bargain-hunting interest. The same can be said for the utilities sector (+0.2%), which dropped 4.7% this week.
Those sectors, though, don't carry the weight to move the broader market, which was held back by losses in the more heavily-weighted financial (-0.2%), health care (-0.3%), consumer discretionary (-0.2%), and information technology (-0.1%) sectors.
The energy sector (+0.2%) for its part moved modestly higher, completing what was an excellent week (+4.6%) as it benefited from sector rotation activity.
Dow component Nike (NKE 63.30, -1.47, -2.3%), meanwhile, ended the week on a disappointing note after its fiscal second quarter report and outlook failed to excite investors further following a big run in the stock ahead of the report.
In other developments, Congress approved a continuing resolution to keep the government funded through January 19. President Trump signed that resolution today shortly before he also signed the tax bill into law.
Reviewing this morning's economic data, which included the Personal Income and Spending, Durable Orders, New Home Sales, and University of Michigan Consumer Sentiment reports:
Personal income increased 0.3% (Briefing.com consensus +0.4%), led by a 0.4% increase in wages and salaries, following an unrevised 0.4% increase in October. Personal spending jumped 0.6% (Briefing.com consensus +0.4%) following a downwardly revised 0.2% increase (from 0.3%) in October.
The personal savings rate dropped to 2.9% from 3.2%. That is the lowest personal savings rate since November 2007.
The PCE Price Index was up 0.2% (Briefing.com consensus +0.3%), leaving it up 1.8% year-over-year versus up 1.6% year-over-year in October. The core PCE Price Index, which excludes food and energy, increased 0.1% (Briefing.com consensus +0.2%) and was up 1.5% year-over-year versus up 1.4% year-over-year in October.
The key takeaway from the report lays in the upward drift of the PCE Price Index. It is moving closer to the Fed's 2.0% longer-run target, which is supportive of the Fed's inclination to pursue an upward drift in the target range for the fed funds rate.
Durable orders increased 1.3% (Briefing.com consensus +2.1%) following an upwardly revised 0.4% decline (from -1.2%) for October. Durable orders excluding transportation declined 0.1% (Briefing.com consensus +0.4%) after increasing an upwardly revised 1.3% (from +0.4%) for October.
The weaker-than-expected readings for November were offset to a large extent by upward revisions to October, so they weren't necessarily that far out of line with prevailing expectations in front of the November report.
The key takeaway from the report is that it will still compute as a positive input for Q4 GDP forecasts since shipments of nondefense capital goods orders excluding aircraft increased 0.3% on top of a 1.3% increase in October.
New home sales soared 17.5% month-over-month to a seasonally adjusted annual rate of 733,000 (Briefing.com consensus 652,000) from a downwardly revised 624,000 (from 685,000) in October. The November sales pace was the strongest since July 2007.
The key takeaway from the report is that there was sales growth in all regions, led by a huge pickup in sales in the South and the West, underscoring the solid demand for new homes in conjunction with a very tight market for existing homes.
The final reading for the University of Michigan Consumer Sentiment report showed a dip to 95.9 (Briefing.com consensus 97.3) from the preliminary reading of 96.8.
The key takeaway from the report is that consumer sentiment remains at high levels. The final December reading was just below the 2017 average of 96.8, which was the highest average since 2000.
The lone economic release on Tuesday will be the S&P Case-Shiller Home Price Index for October (Briefing.com consensus 6.3%).
Nasdaq Composite: +29.3% YTD
Dow Jones Industrial Average: +25.3% YTD
S&P 500: +19.9% YTD
S&P 400: +14.6% YTD
Russell 2000: +13.7% YTD
Week in Review: A Season of Contentment
Notwithstanding the fact that the S&P 500 was only up 0.3% this week, it was a big week for the equity market and for the GOP.
The two were intertwined with the party-line passing of the tax bill, which marked the biggest overhaul of the tax code since 1986.
The featured item of the tax bill was a cut in the corporate tax rate to 21% from 35%, effective in 2018, and it is going to be joined with a reduction in individual tax rates as well.
The stock market has been rallying in recent weeks in anticipation of the tax bill's passage, so the subdued market gains in its wake were a testament to the notion that market participants were inclined to buy the rumor of its passage. They didn't necessarily sell the news, however.
The Dow Jones Industrial Average, the Nasdaq Composite, the S&P 500, the Russell 2000, and the S&P Midcap 400 Index all finished higher for the week, with gains ranging from 0.3% to 0.9%.
Those gains were underpinned by sector rotation, which featured losses for the technology (-0.2%), health care (-1.0%), real estate (-2.3%), utilities (-4.7%), and consumer staples (-0.2%) sectors, and gains for the financial (+0.8%), energy (+4.5%), materials (+2.2%), telecom services (+1.4%), industrials (+1.1%), and consumer discretionary (+1.0%) sectors.
In other words, there was relative strength in many of the cyclical sectors, which are expected to benefit from stronger economic activity. That strength was forged somewhat at the expense of the technology sector, which has been a leading standout all year, inviting concerns that it is overowned and vulnerable to rebalancing efforts as 2017 ends.
Glad tidings pertaining to the expected pickup in economic growth finally availed themselves at the back end of the Treasury yield curve.
The 10-year note yield jumped 14 basis points on the week to 2.49%, which is about even with where it started the year. In turn, the yield on the 2-yr note climbed seven basis points to 1.89%, driving what is referred to as a bear steepening trade in the Treasury market as the change at the back end was greater than the change at the front end.
A steepening yield curve is typically associated with a strengthening economy as stronger growth often invites higher inflation.
The growth outlook was bolstered this week by another batch of generally encouraging data, yet it was fueled by a series of impressive reports out of the housing sector.
The NAHB Homebuilder Index hit its highest level in December since 1999; the pace of existing home sales in November (5.81 million) was the strongest since December 2006; the pace of new home sales in November (733,000) was the strongest since July 2007; and both housing starts and building permits in November were stronger than expected.
Not surprisingly, the iShares U.S. Home Construction ETF (ITB 43.36) outperformed during the week, gaining 1.8%.
On the flip side, the utilities and real estate sectors, which provide nice dividend yields, fared poorly as the jump in long-term rates challenged their appeal for income-oriented investors.
The utilities sector, which is highly regulated, also got pinched by concerns that it won't benefit much from the changes in the tax code.
Fortunately for the broader market, the utilities sector has a very small weighting in the S&P 500, so its large losses were easily offset by the gains in the more heavily-weighted financial and energy sectors.
Generally speaking, then, the stock market is going into the Christmas holiday in good spirits, content to know that a tax cut is coming in 2018 and that Santa is coming on Monday.
Bulls Hold the Line
21-Dec-17 16:25 ET
Dow +55.64 at 24782.29, Nasdaq +4.40 at 6965.36, S&P +5.32 at 2684.57
https://www.briefing.com/investor/markets/stock-market-update/2017/12/21/bulls-hold-the-line.htm
[BRIEFING.COM] The stock market on Thursday did what it has done all year and avoided follow-through losses. Some closing selling interest, however, cut into larger gains and spoiled what was shaping up to be a record-high close for the Dow Jones Industrial Average and Russell 2000.
Still, the major indices never saw red figures during the trading session and ended the day with gains ranging from 0.1% to 0.5%.
There were pockets of weakness, like the semiconductor industry, which fell prone to profit taking, and the utilities sector (-1.2%), which got rolled back on PG&E's (PCG 44.50, -6.62, -13.0%) announcement that it is suspending its dividend to preserve cash in the event its equipment is found to be a substantial cause of the October 2017 Northern California wildfires.
The losses in the semiconductor space knocked the Philadelphia Semiconductor Index back 1.1% and weighed on the S&P 500 information technology sector (-0.3%), which found itself in a trailing position most of the day.
Otherwise, the broader market showed good resilience to selling efforts, garnering support from the outperformance of the energy (+2.1%), financial (+0.9%), telecom services (+0.7%), and consumer discretionary (+0.6%) sectors, which benefited in part from sector rotation and some company-specific announcements.
AT&T (T 38.88, +0.33, +0.9%), for instance, said it will offer its workers $1,000 bonuses and increase its capital spending budget by $1 billion now that tax reform has been approved. Comcast (CMCSA 40.81, +1.43, +3.6%) also announced a plan to give its employees $1,000 bonuses and to increase its capital spending.
Separately, Wells Fargo (WFC 61.61, +1.47, +2.4%) noted, with the passage of the tax bill, that it will raise its minimum hourly pay rate to $15.00 from $13.50. Fifth Third (FITB 30.93, +0.42, +1.4%) also raised its minimum hourly rate to $15.000 and added that it will give a $1,000 bonus to more than 13,500 employees.
The Russell 2000 (+0.5%) outlegged all the other indices as optimism surrounding the cut in the corporate tax rate kept the small-cap index afloat. Domestically-oriented small-cap companies are seen as receiving a greater benefit from that tax cut since they typically pay a higher effective tax rate.
In other developments, the Bank of Japan voted 8-1 to leave its key policy rate and asset purchase program unchanged. Separately, Dow component Boeing (BA 295.03, -2.87, -1.0%) and Brazilian company Embraer (ERJ 24.42, +4.43, +22.2%) confirmed they are holding discussions about a possible combination.
Congress, meanwhile, continues to work on a continuing resolution to keep the government open. A deal needs to be reached before midnight on Friday.
Press reports suggested the leading resolution will provide government funding through January 19. Assuming it is approved, and it also includes a PAYGO waiver, President Trump could sign the tax bill into law as early as Friday.
The latter would be the most notable news item if it happened on Friday, yet it could be preempted possibly by the news of a government shutdown.
Other key happenings on Friday include the release of a large slate of economic data that includes the Personal Income and Spending report for November, the Durable Orders report for November, New Home Sales for November, the final December reading for the University of Michigan Consumer Sentiment Index.
Reviewing Thursday's economic data, which included the third estimate for Q3 GDP, the weekly initial claims, Philadelphia Fed Index, and Leading Economic Index reports:
The third estimate for third quarter GDP carried a slight downward revision to 3.2% (Briefing.com consensus 3.3%) from 3.3%, as more complete source data showed personal consumption expenditures increased less than previously estimated (2.2% vs. 2.3%). The GDP Deflator was left unchanged at 2.1%, as expected.
The key takeaway from the report is that it was little changed, which maintains the impression that U.S. economic output is carrying on at an encouraging 3.0%+ clip.
Initial claims for the week ending December 16 increased by 20,000 to 245,000 (Briefing.com consensus 236,000) while continuing claims for the week ending December 9 increased by 43,000 to 1.932 million.
While the claims headlines were a little worse than expected, the key takeaway is that they did nothing to disrupt the underlying trend of jobless claims running near historically low levels.
The Philadelphia Fed Index increased from 22.7 in November to 26.2 in December (Briefing.com consensus 21.0), led by an eight-point jump in the New Orders Index from 21.4 to 29.8. The dividing line between expansion and contraction is 0.0.
The key takeaway from the report is that current indicators suggest solid growth for the manufacturing sector in the Philadelphia Fed region.
The Conference Board's Leading Economic Index increased 0.4% in November, as expected, on top of an unrevised 1.2% increase in October. November marked the 15th straight month of gains for the Leading Economic Index.
The key takeaway from the report is that the leading economic index increased at a faster pace (3.0%) for the six-month period ending November 2017 than it did for the previous six months (+2.4%), as strengths among the leading indicators have remained widespread.
Tax Reform Bill Heads to the White House
20-Dec-17 16:20 ET
Dow -28.10 at 24726.65, Nasdaq -2.89 at 6960.96, S&P -2.22 at 2679.25
https://www.briefing.com/investor/markets/stock-market-update/2017/12/20/tax-reform-bill-heads-to-the-white-house.htm
[BRIEFING.COM] U.S. equities ticked lower on Wednesday as investors contemplated their next move following the passage of tax reform.
The S&P 500 (-0.1%), the Nasdaq Composite (unch), and the Dow Jones Industrial Average (-0.1%) each finished a tick below their flat lines. Small caps outperformed, evidenced by the Russell 2000, which ended the day higher by 0.2%.
The Senate passed the GOP's tax reform bill shortly after midnight, giving equities a boost at Wednesday's opening bell. However, the early gains didn't last for long as the technology sector (-0.1%) began trending downwards, with Red Hat (RHT 122.00, -6.86) pacing the retreat. RHT finished lower by 5.3% despite reporting above-consensus earnings and revenues.
Technology shares eventually trimmed their losses a bit, thanks in large part to the outperformance of chipmakers, which pushed the PHLX Semiconductor Index higher by 0.7%. Micron (MU 45.75, +1.77) led the semiconductor rally, adding 4.0%, after beating both profit and sales estimates and issuing upbeat guidance for the current quarter.
Congress came back into focus in the early afternoon as the House of Representatives took up tax reform, once again, as procedural rules in the Senate forced minor changes to the bill, nullifying yesterday's passage in the House. The measure was approved, as expected, sending the bill to the White House for a final endorsement.
President Trump likely won't sign the bill into law before the new year as the White House's review process typically takes about seven business days to complete. Regardless, tax reform, which has been a significant factor in this year's equity rally, is essentially a done deal.
Back on Wall Street, the energy sector (+1.4%) had a positive showing, extending its week-to-date gain to 2.2%. West Texas Intermediate crude futures advanced 0.9% to $58.08 per barrel, helping to fuel the energy rally, after the Energy Information Administration reported a draw of 6.5 million barrels for the week ended December 15.
The energy space's advance more than doubled the gain of the second-best performing group--telecom services (+0.6%). AT&T (T 38.55, +0.50) carried the lightly-weighted telecom group, adding 1.3%, after reaffirming its plans to invest an additional $1 billion in the U.S. next year in light of the new tax code.
The industrial space (+0.3%) also outperformed, underpinned by transports, which rallied around FedEx's (FDX 251.07, +8.53) better-than-expected earnings report and upbeat guidance. FDX shares added 3.5%, settling at a new all-time high, while the Dow Jones Transportation Average advanced 0.9%--also finishing at a new record.
On the flip side, the utilities and real estate sectors were the weakest groups, losing 0.8% and 1.1%, respectively. No other sector lost more than 0.4%.
In the bond market, U.S. Treasuries finished mostly lower in a curve-steepening trade that pushed the 2yr-10yr spread higher by five basis points. The yield on the benchmark 10-yr Treasury note climbed four basis points to 2.50%, which marks a nine-month high, while the 2-yr yield slipped one basis point to 1.85%.
Elsewhere, equity indices in the Asia-Pacific region finished Wednesday little changed, while the Euro Stoxx 50 settled with a loss of 0.9%.
Reviewing Wednesday's economic data, which included November Existing Home Sales and the weekly MBA Mortgage Applications Index:
Existing home sales increased 5.6% in November to an annualized rate of 5.81 million units (Briefing.com consensus 5.56 million). The October reading was revised to 5.50 million from 5.48 million.
The key takeaway from the report is that notable supply constraints remain, which will continue to act as a drag on overall sales due to the limited inventory and the high prices on available inventory that is crimping affordability, particularly for first-time buyers.
The weekly MBA Mortgage Applications Index decreased 4.9% to follow last week's 2.3% decline.
On Thursday, investors will receive the third estimate of third quarter GDP (Briefing.com consensus +3.3%), the Philadelphia Fed Index for December (Briefing.com consensus 21.0), and weekly Initial Claims (Briefing.com consensus 236K) at 8:30 ET, followed by the October FHFA Housing Price Index (Briefing.com consensus +0.4%) and the November Leading Economic Index (Briefing.com consensus +0.4%), which will cross the wires at 9:00 ET and 10:00 ET, respectively.
Nasdaq Composite +29.3% YTD
Dow Jones Industrial Average +25.1% YTD
S&P 500 +19.7% YTD
Russell 2000 +13.5% YTD
Modest Losses Ahead of Senate Vote
19-Dec-17 16:15 ET
Dow -37.45 at 24754.75, Nasdaq -30.91 at 6963.85, S&P -8.69 at 2681.47
https://www.briefing.com/investor/markets/stock-market-update/2017/12/19/modest-losses-ahead-of-senate-vote.htm
[BRIEFING.COM] U.S. equities slipped from record highs on Tuesday as investors cautiously awaited the Senate's vote on tax reform.
The major indices held modest losses throughout most of the session, and a late wave of selling left them near their session lows. The Dow Jones Industrial Average lost 0.2%, the S&P 500 declined by 0.3%, and the tech-heavy Nasdaq dropped 0.4%. Small caps underperformed, sending the Russell 2000 lower by 0.8%.
Tuesday's main event was the House's vote on tax reform, which took place at around 2:30 PM ET. The House passed the GOP's bill, as expected, in a party-line vote. The bill will now go to the Senate, where it will have a more narrow path to passage as the GOP has just a two-vote majority in the upper house. Still, the measure is expected to pass.
The Senate began the ten hours of required debate on the bill shortly before the closing bell, putting a final vote on track for early Wednesday morning.
Most sectors finished Tuesday in negative territory, a reverse of Monday's session. The utilities (-1.8%) and real estate (-1.9%) groups paced the retreat, but it was the top-weighted technology space (-0.5%) that had the most bearish impact on the broader market.
Tech shares were broadly weak, but Apple (AAPL 174.54, -1.88) showed particular weakness after Nomura downgraded the tech giant's shares to 'Neutral' from 'Buy' on Tuesday morning; AAPL shares ended the day lower by 1.1%. Chipmakers outperformed their tech peers, but still pulled the PHLX Semiconductor Index lower by 0.1%.
On the upside, the consumer staples sector (+0.2%) bounced back from a relatively poor outing on Monday. The group's largest component by market cap--Wal-Mart (WMT 98.80, +0.90)--was among the top performers, adding 0.9%, after Citigroup upgraded WMT shares to 'Buy' from 'Neutral.'
Corporate news was pretty light on Tuesday, but it's worth pointing out that Darden Restaurants (DRI 96.69, +6.15)--the owner of chains like Olive Garden and LongHorn Steakhouse--jumped 6.8% after reporting better-than-expected earnings and revenues for its fiscal second quarter. The company also raised its guidance for 2018.
In the bond market, U.S. Treasuries sold off on Tuesday, with longer-dated issues showing relative weakness. The yield on the 2-yr Treasury note climbed three basis points to 1.86%, while the benchmark 10-yr yield jumped seven basis points to 2.46%--its best level in two months. The 2yr-10yr spread hit a fresh December high (60 bps).
Elsewhere, equity indices in the Asia-Pacific region finished Tuesday mostly higher, while the major European bourses ended on a mostly lower note. Japan's Nikkei (-0.2%) exhibited relative weakness in Asia and the UK's FTSE (+0.1%) outperformed its peers across the pond.
Reviewing Tuesday's economic data, which included November Housing Starts, November Building Permits, and the Current Account Balance for the third quarter:
Housing starts increased to a seasonally adjusted annualized rate of 1.297 million units in November (Briefing.com consensus 1.259 million), up from a revised 1.256 million units in October (from 1.290 million). Building permits decreased to a seasonally adjusted 1.298 million in November (Briefing.com consensus 1.280 million) from a revised 1.316 million in October (from 1.297 million).
The key takeaway from the report is that there was a 1.4% increase in permits for single-family homes and a 5.3% increase in single-family starts, as that is where supply growth is greatly needed to meet home buyer demand.
The current account deficit for the third quarter totaled $100.6 billion (Briefing.com consensus -$117.4 billion). The second quarter deficit was revised to $124.4 billion from $123.1 billion.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index and November Existing Home Sales (Briefing.com consensus 5.56 million). The two reports will be released at 7:00 ET and 10:00 ET, respectively.
Nasdaq Composite +29.4% YTD
Dow Jones Industrial Average +25.3% YTD
S&P 500 +19.8% YTD
Russell 2000 +13.2% YTD
Tax Reform Provides Yet Another Boost
18-Dec-17 16:30 ET
Dow +140.46 at 24792.20, Nasdaq +58.18 at 6994.76, S&P +14.35 at 2690.16
https://www.briefing.com/investor/markets/stock-market-update/2017/12/18/tax-reform-provides-yet-another-boost.htm
[BRIEFING.COM] Investors pushed U.S. equities to new record highs on Monday, excited by the promising outlook for the GOP's tax reform bill.
The Nasdaq Composite (+0.8%), the Dow Jones Industrial Average (+0.6%), and the S&P 500 (+0.5%) each settled at new all-time highs. However, modest selling in the afternoon left the indices a step below their best marks of the day. The Russell 2000 (+1.2%) paced Monday's rally and, like its peers, finished at a new record high.
Republicans appear set to pass their tax overhaul bill in the next few days after securing the support of Senators Marco Rubio (R-FL) and Bob Corker (R-TN) on Friday. The bill, which calls for reducing the corporate tax rate to 21% from 35% in 2018, was unveiled on Friday evening and can undergo no further changes due to procedural rules.
The bill's chances of passage looked even better late Monday afternoon when CNBC reported that Senator Mike Lee (R-UT) has decided to vote in favor of the bill. If all goes according to plan, President Trump should secure his first major legislative victory by the end of the week.
Eight of eleven sectors finished Monday in the green, and, in general, cyclical sectors outperformed their countercyclical peers. The lightly-weighted materials space (+1.5%) was the top-performing group, helped by DowDuPont's (DWDP 71.39, +1.39) advance of 2.0%, while no other sector added more than 1.0%.
Within the top-weighted technology space (+0.8%), chipmakers showed relative strength, sending the PHLX Semiconductor Index higher by 2.2%. Retailers also had a positive showing on Monday, helping to boost the consumer discretionary space (+0.8%); the SPDR S&P Retail ETF (XRT 45.46, +1.18) climbed 2.7%.
The Dow Jones Transportation Average advanced 1.2% to a new all-time high, but the industrial sector (+0.7%) finished just a tick ahead of the broader market.
On the downside, the utilities sector (-1.2%) had a rough outing, extending its month-to-date loss to 3.2%. The group has struggled in recent weeks amid concerns about wildfires in Southern California. The consumer staples space (-0.1%) and the health care group (unch) also finished Monday in the red.
In corporate news, Amplify Snack Brands (BETR 12.01, +5.01), which makes the Skinny Pop brand, surged 71.6% after agreeing to be acquired by Hershey (HSY 114.26, +0.12) for $12.00 per share in cash. HSY shares finished the session with a slim gain of 0.1%.
U.S. Treasuries ended Monday mixed, with shorter-dated issues showing relative strength. The yield on the 2-yr Treasury note slipped one basis point to 1.83%, while the benchmark 10-yr yield climbed three basis points to 2.39%. Yields move inversely to prices.
Elsewhere, equity indices in the Asia-Pacific region ended Monday in positive territory, with Japan's Nikkei (+1.6%) showing particular strength, while the Euro Stoxx 50 jumped 1.4%. The U.S. Dollar Index declined 0.2% to 93.24, with the greenback losing 0.3% against the euro (1.1781) and 0.5% against the pound (1.3382).
Reviewing Monday's economic data, which was limited to the NAHB Housing Market Index for December:
The NAHB Housing Market Index for December rose to 74 (Briefing.com consensus 70) from a revised reading of 69 in November (from 70).
On Tuesday, investors will receive three pieces of data--November Housing Starts (Briefing.com consensus 1259K), November Building Permits (Briefing.com consensus 1280K), and the Current Account Balance for the third quarter (Briefing.com consensus -$117.4 billion)--all of which will be released at 8:30 ET.
Nasdaq Composite +29.9% YTD
Dow Jones Industrial Average +25.5% YTD
S&P 500 +20.2% YTD
Russell 2000 +14.1% YTD
Waiting for the Curve to Invert
https://www.financialsense.com/kurt-kallaus/waiting-curve-invert
One of the hallmarks of a Bull market is climbing a “Wall of Worry”. Certainly, there is plenty of longer-term optimism with Consumer and Small Business surveys showing extreme confidence. Yet analysts seem increasingly focused on what might go wrong. In the early days of 2009 – 2012 most were certain that the Trillions in money printing by central banks would cause massive inflation and thus contraction level node-bleed interest rates. Recently the worry du jour has been on rising short-term rates that is spiraling our Yield Curve towards inversion. It’s perhaps too widely know that Yield Curve inversion has always given an accurate warning of impending economic recession months later. In “waiting for the curve” too many investors are cautious well before some unforeseeable inversion turning point. This chart clearly shows that historically the “current” Yield Curve is not a concern, in fact, it will remain a positive factor as we approach inversion. Furthermore, even after the ominous flat yield spread is reached where short-term rates are equal to or above long-term yields, we often witness another year or more of positive growth before recessionary contraction pressures break the back of the expansion phase. Based on history, we have at least a couple years of expansion before push comes to shove in halting this 8+ year growth period.
yield curve is still bullish
We need to be cautious even about the merit of the yield curve if and when it does invert this time given the unusual influence of Central Banks adding reserves as never before. It should always be remembered that Central Bank efforts to flatten the yield curve, first in the US and later in Europe/Japan, are mostly an effort to regain some policy arrows to shoot back into the market in the form of lower rates and massive money printing at the first sign of any new economic contraction. You can bet that Central Banks will be impatient to stop any recession before it starts (with 2 consecutive quarters of negative GDP). Note the sharper yield spread contraction during the 4th quarter (below), where 30 Year Treasuries ($TYX) fell, 10 Year Treasuries ($TNX) were flat and 5 Year Treasuries ($FVX) rose sharply. We suspect that long rates will start rising with shorter maturities in coming months as the Fed approaches its 2 to 2.5% Fed Funds target.
yield curve narrowing
The NFIB Small Business Optimism index soared upon Trump’s election and has now soared even higher as the Tax cut package becomes more certain in late 2017. Readers know we have been comparing the current period to various metrics from late 1995 and late 2004. Interestingly even this Small Business sentiment chart shows a similar comparison of 2017 with 2004 when the economy really kicked into a higher gear. The current yield curve spread (1st chart) is near the April 2005 level when another 2 to 3 years of growth remained in stocks and the economy.
overview small business optimism
The US yield curve is aggressively flattening compared to the world as only our Fed has been pushing short-term rates higher relative to the European bank in recent months. Europe and Japan will join the US and begin their tightening phase during the 2nd half of 2018. At some point in the first half of 2018, the market will anticipate this and trigger equity corrections and increasingly volatility skepticism prior to the next major run in stocks to new record highs.
european yield curve remains positive vs us
It’s too early to be “waiting on the curve” to become defensive in stocks longer term. Correction odds will rise in 2018 after 13 months of record low volatility and only a few minuscule 3% hiccups. This may resemble 1996 conditions that ensued after its record low year of volatility in 1995. While 1996 had deeper corrections, it was still a very positive year of gains for stocks. It’s very likely the Yield Curve will be on the verge of inversion in about a year from now, but this is only a warning sign that will require a calm review of other metrics confirming that credit conditions are indeed very tight and warranted by an overheating economy. With this new post Mortgage Bubble era of aggressive Central Bank intervention, we are skeptical just how far a future credit contraction can last in this era of hyper-debt sensitivity.
InvestmentHouse - Yearend Rally Just Caught On (Weekend Newsletter)
Read "The Daily" Entire Weekend SummaryRead "The Daily" Entire Weekend Summary
- The tax reform dance: market drops, rallies based upon a few senators.
- Stocks surge back with even NASDAQ punching a new high ticket.
- FAANG trying to rejoin leadership, small caps as well.
- Economic data back and forth but trending higher ahead of a very busy data
week.
- Rally toward yearend may have just caught on for all indices.
-
Just when you thought the tax cut news was all baked into the market you get
a couple of 'no' votes crossing over to 'yes,' even Korker's, and you get a
market recovery, indeed, surge. Thursday RUTX and SP400 sold off on renewed
worries the bill would fail when Marco Rubio and Mike Lee were said to be a
'no' and a 'leaning no.' Rubio got what he wanted and Korker's came out of
nowhere as a yes. Stocks got what they wanted and rallied to new highs on
NASDAQ, NASDAQ 100, SP500, and DJ30.
SP500 23.80, 0.90%
NASDAQ 80.05, 1.17%
DJ30 143.08, 0.58%
SP400 1.05%
RUTX 1.56%
SOX 1.50%
NASDAQ 100 1.20%
VOLUME: NYSE +194%, NASDAQ +77%. Okay, it was quadruple expiration and thus
volume exploded upside.
ADVANCE/DECLINE: NYSE 2.2:1, NASDAQ 2.3:1. Very passable numbers. That is
all, just passable. With 1+% moves on the growth indices you would
anticipate 3:1 or so.
NEWS/ECONOMY
On a week of back and forth economic news the market showed a lot of back
and forth itself, but the major indices did not give up their trends.
Retail Sales, November topped expectations at 0.8%, 1.0% if you take out
autos. Clothing, Food and Drink, online sales were all strong.
Core CPI rose 0.1% month/month, sliding to +1.7% year/year versus the 1.8%
prior. Oh no, no inflation. The Phillips Curve readers remain confused.
Oh, there is inflation, it is just the kind that the antiquated way we
measure price increases misses. Producers make smaller sizes but charge the
same price; no inflation as per the government measures, but you pay more
for less. Voila, inflation.
New York Empire PMI at 18.0 fell from 19.4 and was the lowest since July.
At the same time, however, the New York Fed says the economy is growing at
4+% while the Atlanta Fed says 3.3%. Three 3+% GDP quarters in a row? That
is a long time coming.
So, the argument goes, why tax cuts? Because we need tax reform to compete
in the changing world. Lower corporate and small business taxes. Get out
of states forced to subsidize other states' profligate spending by limiting
SALT deductions (and they should be phased out for everyone). After years
of struggling with no investment, businesses and individuals are finally
feeling some optimism and are spending money.
That is all based upon an expectation for change and the repeal of thousands
of regulations from the prior administration. If you remove the restraints
on investment from the increased taxes, from the ACA, and from regulation,
the US could really boom, not just put in the 'usual' 3% growth experienced
these three last quarters. That is what we usually run. In a recovery, an
unfettered economy would really surge in the 4%, 5% or better range.
As you can see, I don't buy into the 'US has run its course' economic
argument. That is the SAME theory and argument heard in the late 1970's. I
recall it clearly: Newsweek, Time and others discussing how the US economic
run was impressive but over. Demographics changed, other countries were
rising, blah, blah, blah. SAME arguments are heard today: changing
demographics, changing world economics. IT DOESN'T MATTER. If we free up
our innovators from regulations and skewed tax codes, our system has always
produced the best and the most. Communism, even the updated version China
practices, cannot do that. Socialism obviously not. It is the system that
produces the outcomes. We need to let it work. Dance with who brought you
as the old Darrell Royal phrase goes.
Thus, if we truly reform the code to let money flow where it is most needed
or where the markets believe it should go, we will come up with the new
innovations that create demand where there was none before. No one needed a
personal computer. Heard that over and over in the 1980's. Apple made one
and what do you know, everyone needed one. People were not out saying 'we
need a personal computer!' People with vision saw the future and made the
goods that would be needed. That is how you make the innovations that drive
the next technology booms and the jobs they create.
That drives economic growth not at just a 3% average, but well above that.
In the 1980's that recovery produced 4%, 5%, 7%, 11% quarterly GDP growth.
If we had not loused up so bad in the 2000's with the recovery we would have
don't it again. Instead we regulated and mandated and taxed the economy to
less than 2% growth in a recovery. As I said then, that was no recovery.
Finally, NOW we are seeing are recovery, and it is based just on
ANTICIPATION of real change.
Now you see why the markets are up on tax reform talk and trade back and
forth based upon how that talk is going. If people would only READ and
attempt to understand what the tax reform bill is going to do for them
versus listening to soundbites from the network and cable news, they would
understand that the changes proposed are truly game changing and will
overall rev up the US economy once again. We then all benefit from the
growth, the new jobs, and yes, the increased tax revenues. We have to put
aside the 'what is in it for me that I directly get?' mindset and see the
big picture just as in the early 1980's.
THE MARKET
CHARTS
NASDAQ: A long time coming (since late November), NASDAQ broke to a new
high. After the rotation from these stocks to start December, they are back
for now after a brush near the 50 day EMA. NASDAQ is on its fourth run
after the third 20 day EMA test since breaking higher off the 50 day in
mid-September. Four to five such bounces are typical off a 50 day MA test.
DJ30: New high as well, the Dow now on its fifth rotation off the short
term moving averages after the last 50 day EMA in early September. DJ30 is
12+% over the 200 day MA, getting stretched on this move. No signs of
slowing thus far.
SP500: Still moving up off the 10 day EMA as SP500 presses its 14 week run
after starting at the 50 day MA in late August. 8% over the 200 day SMA and
still on the run thanks to the financial stocks working better and the big
techs rallying.
RUTX: RUTX was all over the map to end the week. Up Wednesday off support,
broke lower Thursday and fell to the 50 day EMA. Friday back up with a
higher recovery high. Nothing like tax cuts for the small caps.
SP400: Tested again on the week, a second week of consolidation after the
higher high to end November. Looked problematic Thursday as it closed below
the 20 day EMA, but then rebounded nicely to end the week. Nice trend
remains.
SOX: struggled all week below the 50 day EMA but Friday managed a close
above that level. Still below the 50 day SMA but trying to change its
outlook a la some of the NASDAQ big names that crashed their support but
have recovered.
LEADERSHIP
FAANG: A big part of NASDAQ, these stocks improved dicey patterns to good
moves. AAPL remains in a good pattern, and rallied nicely Friday. FB is up
off the 50 day MA test put in after the initial rebound from the early
December selling. AMZN doing the same. GOOG broke to a higher high --
recovery is in. NFLX is trying, but is lagging, back at the 50 day MA
still.
Drugs/Biotechs: Money is moving into the smaller names from what we are
seeing. IMGN is starting upside for us as did ENDP, MRTX. There are many
others we are looking at.
Financial: Tested to end the week, but a good week for GS, MS. Banks are
still solid enough as they put in a modest test, e.g. BAC, JPM. TCBI is
starting to break higher, one we are looking to enter.
Retail: COST gapped on its results. While most pulled back, the patterns
remain solid. TJX, ROST, BBBY, TGT.
Semiconductors: Some good setups and moves starting. INTC jumped, and if
it continues, we move in. CAVM looks very good and MRVL has a good pattern.
LRCX, AMAT recovering but still problematic. Very mixed but improving and
some are running, e.g. CREE.
Machinery/Manufacturing: Struggled to end the week, giving up some gains,
e.g. HON, MMM, TEX.
MARKET STATS
DJ30
Stats: +143.08 points (+0.58%) to close at 24651.74
Nasdaq
Stats: +80.06 points (+1.17%) to close at 6936.58
Volume: 3.5B (+76.77%)
Up Volume: 2.51B (+1.744B)
Down Volume: 929.88M (-250.12M)
A/D and Hi/Lo: Advancers led 2.31 to 1
Previous Session: Decliners led 2.25 to 1
New Highs: 133 (+40)
New Lows: 51 (-19)
S&P
Stats: +23.80 points (+0.90%) to close at 2675.81
NYSE Volume: 2.4B (+194.91%)
A/D and Hi/Lo: Advancers led 2.22 to 1
Previous Session: Decliners led 1.85 to 1
New Highs: 123 (+42)
New Lows: 32 (-17)
SENTIMENT INDICATORS
VIX: 9.42; -1.07
VXN: 11.88; -0.51
VXO: 7.88; -0.81
Put/Call Ratio (CBOE): 0.97; +0.17
Bulls and Bears: Pretty large drop though still easily over 60 for the
bulls. That is still in the overly optimistic range and of course the surge
Friday will bring them around again to the upside. This is a warning
indication, but not a great timing device.
Bulls: 61.9 versus 64.2
Bears: 15.2 versus 15.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 61.9 versus 64.2
64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5 versus 62.3
versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1
versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0
versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5
versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7
versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5
versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8
versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
Bears: 15.2 versus 15.1
15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1
versus 15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2
versus 19.1 versus 19.1 versus 18.3 versus 18.1 versus 17.0 versus 16.2
versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3
versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9
versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75
versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6
versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6
versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7
versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1
versus 24.3
OTHER MARKETS
Bonds: 2.351% versus 2.351%. Bonds overall rallied Friday even if the 10
year was steady. Curve flattens farther.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.351%
versus 2.36% versus 2.403% versus 2.389% versus 2.378% versus 2.34% versus
2.353% versus 2.381% versus 2.363% versus 2.363 versus 2.412% versus 2.385%
versus 2.326% versus 2.329% versus 2.321% versus 2.34% versus 2.354% versus
2.367% versus 2.345% versus 2.37% versus 2.336% versus 2.375% versus 2.407%
versus 2.402% versus 2.34% versus 2.326% versus 2.316% versus 2.32% versus
2.332% versus 2.349% versus 2.358% versus 2.378% versus 2.37% versus 2.419%
versus 2.456% versus 2.435% versus 2.421% versus 2.366% versus 2.383% versus
2.318% versus 2.341% versus 2.30% versus 2.302% versus 2.275%
EUR/USD: 1.1752 versus 1.17798. Euro tried to bounce Wednesday, fell back
to the 50 day SMA on the Friday close.
Historical: 1.17798 versus 1.18392 versus 1.17430 versus 1.17652 versus
1.1764 versus 1.17754 versus 1.17990 versus 1.18276 versus 1.18727 versus
1.18983 versus 1.18976 versus 1.18529 versus 1.18489 versus 1.1899 versus
1.19329 versus 1.18148 versus 1.17402 versus 1.1791 versus 1.1787 versus
1.1786 versus 1.1799 versus 1.16443 versus 1.16646 versus 1.16439 versus
1.15871 versus 1.15954 versus 1.1609 versus 1.16092 versus 1.16575 versus
1.15480 versus 1.1644 versus 1.16091 versus 1.16330 versus 1.18163 versus
1.17570 versus 1.1759 versus 1.17798 versus 1.18476 versus 1.17995 versus
1.1771 versus
USD/JPY: 112.619 versus 112.298. Dollar fell on the week, tried to buck up
Friday over the 200 day SMA.
Historical: 112.298 versus 112.639 versus 113.555 versus 113.476 versus
113.48 versus 113.473 versus 112.473 versus 112.554 versus 112.442 versus
112.190 versus 112.55 versus 112.102 versus 111.583 versus 111.244 versus
111.523 versus 111.247 versus 112.349 versus 112.615 versus 112.124 versus
112.91 versus 112.879 versus 113.430 versus 113.615 versus 113.526 versus
113.379 versus 113.99 versus 113.723 versus 113.758 versus 114.064 versus
114.010 versus 114.010 versus 113.845 versus 113.640 versus 113.175 versus
113.675 versus 114.071 versus 113.607 versus 113.913 versus 113.31 versus
113.530 versus 112.561 versus 113.031 versus 112.21 versus 112.20 versus
111.852
Oil: 57.33, +0.29. Still working in the lateral 3 week range over the
rising 50 day MA.
Gold: 1257.90, +0.40. Rebounded on the week to test up near the 200 day
SMA Showed a doji, looks as if it will break back downside.
MONDAY
Fed hiked rates as expected, has a gentle upward slope as expected, lots
more data to come in the week ahead: Housing starts, Existing Home Sales,
GDP third, Philly Fed, Leading indicators, Personal income and spending,
Durable Goods Orders, New Homes, Michigan Sentiment. A veritable data dump.
Overall the economic data is up and down but trending up.
The big event of course will be the tax reform vote set for Tuesday as of
this writing. Friday's rally built upon 'no' votes turning 'yes,' including
Corker (Korker's). Collins and Flake are still nut jobs while McCain and
Cochran, both suffering some medical impairment, are expected to be back
next week. Pence is hanging around DC just in case.
With the move Friday and based upon our belief the tax bill passes one way
or another, most new plays are to the upside. Some more drug plays,
software, even a chip or two. The market may be extended or on the last
move higher in these runs, but the plays down below are setting up. In
other words, some areas have not rallied and are setting up good patterns to
turn off the lows; seen that before, many times.
So, let the good positions continue working and watch for the money pushing
new plays such as the small drugs and others back upside.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6936.58
Resistance:
Support:
6914 is the late November all-time high
6796 is the early November 2017
The 50 day EMA at 6737
6641 is the October high
The 2016 trendline at 6589
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
The 200 day SMA at 6320
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2675.81
Resistance:
Support:
The 20 day EMA at 2634
2597 is the November 2017 all-time high
The 50 day EMA at 2596
2549 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
2480 the late August and early August highs
The 200 day SMA at 2468
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 24,651.74
Resistance:
Support:
24,255-ish
The 20 day EMA at 24,136
23,602 is the early November 2017 high
23,608 is the early November high
The 50 day EMA at 23,608
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
The 200 day SMA at 21,935
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
Stocks Hit New Records As Tax Reform Looks Likely
15-Dec-17 16:30 ET
Dow +143.08 at 24651.74, Nasdaq +80.06 at 6936.58, S&P +23.80 at 2675.81
https://www.briefing.com/investor/markets/stock-market-update/2017/12/15/stocks-hit-new-records-as-tax-reform-looks-likely.htm
[BRIEFING.COM] Equities advanced to new record highs on Friday, underpinned by a renewed faith in tax reform.
The Nasdaq (+1.2%), the S&P 500 (+0.9%), and the Dow Jones Industrial Average (+0.6%) each finished at a new all-time high, ending the week with gains between 0.9% and 1.4%. The Russell 2000 (+1.6%) outperformed, bouncing back from a disappointing outing on Thursday, but the small-cap index did not close at a record high.
Wall Street was bullish from the jump, but stocks went on to double their opening gains following reports that Senator Marco Rubio (R-FL) will vote in favor of the GOP's tax reform bill.
Mr. Rubio's support was in question prior to the reports after he said on Thursday that he would vote against the measure unless the final bill further expands the child tax credit for lower-income households. To ease Mr. Rubio's concerns, the proposed child tax credit was increased to $1,400 from $1,100.
In addition, Senator Bob Corker (R-TN) announced that he will also support the tax reform bill. Mr. Corker's support is seen as a sign that the GOP has secured enough votes to pass the measure since Mr. Corker was the only Republican to vote against the Senate's original version of the bill. A final vote is expected to take place early next week.
Friday's rally was broad as 10 of 11 S&P 500 sectors finished in positive territory. The top-weighted technology (+1.2%), financials (+1.0%), and health care (+1.2%) sectors, which comprise more than half of the broader market combined, were among the top-performing groups. Conversely, the energy sector struggled, closing a tick below its unchanged mark.
In corporate news, Adobe Systems (ADBE 177.49, +2.49) and Costco (COST 192.73, +6.20) jumped 1.4% and 3.3%, respectively, after both companies reported better-than-expected earnings and revenues. Adobe also issued above-consensus profit guidance for its fiscal first quarter.
Conversely, Oracle (ORCL 48.30, -1.89) tumbled 3.8% after issuing a disappointing forecast for growth in its cloud-computing business. Railroad giant CSX (CSX 52.93, -4.38) also finished solidly lower, losing 7.6%, after disclosing that CEO E. Hunter Harrison is on medical leave due to unexpected complications from a recent illness.
In the bond market, U.S. Treasuries ended the week on a mixed note; shorter-dated maturities registered modest losses, while the long bond continued its show of relative strength. The 2-yr yield jumped four basis points to 1.84%, the 10-yr yield climbed one basis point to 2.36%, and the 30-yr yield slipped two basis points to 2.69%.
Elsewhere, equity indices in the Asia-Pacific region finished Friday on a lower note, with Hong Kong's Hang Seng (-1.1%) pacing the retreat, while the Euro Stoxx 50 advanced 0.2%. The UK's FTSE (+0.6%) showed relative strength, helped by weakness in the British pound--which dropped 0.8% against the U.S. dollar to 1.3330.
Reviewing Friday's economic data, which included Industrial Production and Capacity Utilization for November and the Empire State Manufacturing Survey for December:
Industrial Production increased 0.2% in November (Briefing.com consensus +0.3%), while the October increase was revised to 1.2% (from 0.9%). Capacity Utilization ticked up to 77.1% (Briefing.com consensus 77.2%) from an unrevised reading of 77.0% in October.
The key takeaway from the report is that industrial production was flat in November, excluding the post-hurricane rebound in oil and gas extraction.
The Empire Manufacturing Survey for December declined to 18.0 (Briefing.com consensus 18.0) from the prior month's reading of 19.4.
On Monday, investors will receive just one economic report--the NAHB Housing Market Index for December--which will be released at 10:00 ET.
Nasdaq Composite +28.9% YTD
Dow Jones Industrial Average +24.7% YTD
S&P 500 +19.5% YTD
Russell 2000 +12.8% YTD
Week In Review: Central Banks Take Center Stage
U.S. stocks climbed to new record highs this week as investors digested policy directives from several of the world's most influential central banks and grew increasingly optimistic about the GOP's chances of passing its promised tax overhaul.
The S&P 500 added 0.9%, the Dow advanced 1.3%, and the Nasdaq jumped 1.4%. All three major indices settled Friday's session at fresh record highs.
The Federal Open Market Committee voted to raise the fed funds target range by 25 basis points to 1.25%-1.50% on Wednesday, as expected. Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari--the FOMC's two most dovish members--dissented, saying they preferred to keep the target range unchanged.
In addition, the Fed's so-called "dot plot" revealed that the median FOMC member still anticipates three rate hikes in 2018 and two in 2019. Both figures were unchanged from the projections released in September, even though the central bank acknowledged that overall inflation and core inflation have declined this year and are running below 2.0%.
U.S. Treasuries rallied in a curve-flattening trade on Wednesday following the decision, while the U.S. Dollar Index moved sharply lower. The 2yr-10yr spread ended the week at 52 basis points, which is six basis points below last week's closing level. The U.S. Dollar Index finished the week higher by 0.1% at 93.94.
The flattening of the yield curve weighed on lenders, sending the S&P 500's financial sector lower by 0.1%.
Elsewhere, the European Central Bank decided to leave its key policy rate unchanged, as expected, and reiterated that it will reduce its monthly asset purchases to EUR30 billion (from EUR60 billion) starting in January and continuing through September 2018--or beyond, if necessary.
The Bank of England also met this week, voting to leave its key rate at 0.50% and its asset purchase program at GBP435 billion, as expected.
In Washington, House and Senate Republicans reportedly reached an agreement on a final version of their tax reform bill on Wednesday, but Senator Marco Rubio (R-FL) pushed for some last-minute changes, saying on Thursday that he would vote against the measure unless it further expands the child tax credit for lower-income households.
GOP leadership worked to appease Mr. Rubio and earned his support, as well as the support of Senator Bob Corker (R-TN), on Friday. With the two Senators on board, it appears that the Republicans have enough support to pass their tax reform bill, but a final vote won't take place until early next week.
On Wall Street, telecom shares within the S&P 500 jumped 4.0% this week, underpinned by the prospect of tax reform and the Federal Communications Commission's decision to roll back the "net neutrality" rules put in place by the Obama administration back in 2015. The rules required broadband providers to treat all internet traffic equally.
In corporate news, Walt Disney (DIS) agreed to purchase select assets from 21st Century Fox (FOXA), including its film division and much of its TV operations, for $52.4 billion in stock. The two companies added 6.8% and 5.1%, respectively, helping the consumer discretionary sector (+1.1%) finish ahead of the broader market.
Wall Street Slips as Investors Continue to Chew On Tax Reform
14-Dec-17 16:15 ET
Dow -76.77 at 24508.66, Nasdaq -19.27 at 6856.53, S&P -10.84 at 2652.01
https://www.briefing.com/investor/markets/stock-market-update/2017/12/14/wall-street-slips-as-investors-continue-to-chew-on-tax-reform.htm
[BRIEFING.COM] U.S. equities slipped on Thursday as investors continued to monitor tax reform developments in Washington.
Losses were modest for the most part, but small caps showed notable weakness, pushing the Russell 2000 lower by 1.2%. The S&P 500 declined by 0.4%, while the Nasdaq Composite and the Dow Jones Industrial Average shed 0.3% apiece. The Dow's loss ended its streak of record closes at four in a row.
Equities began the day slightly higher, but were tripped up by rumors that House Speaker Paul Ryan (R-WI) is considering resigning following the 2018 mid-term elections. Mr. Ryan later said that he does not plan on retiring anytime soon, but equities failed to bounce back to their earlier levels.
Selling persisted following news that Senator Marco Rubio (R-FL) will vote 'No' on tax reform unless the final bill further expands the child tax credit for lower-income households. The GOP can only afford to lose two votes in the Senate, and it's already assumed that Senator Bob Corker (R-TN) will vote against the piece of legislation.
The GOP aims to release the full details of the bill on Friday, and Congress is expected to vote on the measure sometime next week.
Ten of the eleven sectors finished Thursday in the red, with the health care (-1.1%), materials (-1.1%), and telecom services (-0.9%) groups being the weakest performers. Within the health care space, biotech names were especially weak, sending the iShares Nasdaq Biotechnology ETF (IBB 105.17, -1.55) lower by 1.5%.
Meanwhile, steelmaker Nucor (NUE 59.54, -2.31) paced the material sector's retreat, losing 3.7%, after lowering its profit guidance for the fourth quarter.
On the upside, the consumer discretionary sector (+0.3%) advanced on Thursday. 21st Century Fox (FOXA 34.88, +2.13) led the charge, adding 6.5%, after Walt Disney (DIS 110.57, +2.96) agreed to purchase select assets from the company, including its film division and much of its TV operations, for $52.4 billion in stock. DIS shares climbed 2.8%.
In the bond market, U.S. Treasuries had a mixed outing, despite a stronger-than-expected Retail Sales Report for November (see data section below). The yield on the benchmark 10-yr Treasury note finished flat at 2.35%, while the 2-yr yield climbed one basis point to 1.80%. The 10-yr yield has lost three basis points so far this week.
Elsewhere, European equities finished Thursday broadly lower, with the Euro Stoxx 50 losing 0.5%, while Japan's Nikkei, Hong Kong's Hang Seng, and China's Shanghai Composite shed 0.3% apiece. The U.S. dollar added 0.4% against the euro (1.1785) but lost 0.3% and 0.1%, respectively, against the yen (112.25) and the pound (1.3430).
The European Central Bank decided to leave its key policy rate unchanged, as expected, and reiterated that it will reduce its monthly asset purchases to EUR30 billion (from EUR60 billion) starting in January and continuing through September 2018, or beyond, if necessary.
In addition, the Bank of England voted unanimously to leave its key rate at 0.50% and its asset purchase program at GBP435 billion, as expected.
Reviewing Thursday's economic data, which included November Retail Sales, weekly Initial Claims, November Export/Import Prices, and October Business Inventories:
November retail sales increased 0.8% (Briefing.com consensus +0.3%). The prior month's increase was revised to 0.5% from 0.2%. Excluding autos, retail sales increased 1.0% in November while the Briefing.com consensus expected an increase of 0.6%. The prior month's increase was revised to 4% from 0.1%.
The key takeaway from the report is that there was healthy spending activity across discretionary categories, which is consistent with a consumer feeling good about their income prospects.
The latest weekly initial jobless claims count totaled 225,000, while the Briefing.com consensus expected a reading of 239,000. Today's tally was below the unrevised prior week count of 236,000. As for continuing claims, they declined to 1.886 million from the revised count of 1.913 million (from 1.908 million).
The latest week marks the 145th straight week initial claims have been below 300,000.
Import prices excluding oil were flat in November (0.0%) after increasing a revised 0.1% in October (from +0.2%). Export prices excluding agriculture increased 0.6% in November after decreasing a revised 0.1% in October (from -0.3%).
The monthly gain left import prices up 3.1% year-over-year, versus up 0.2% for the 12 months ending November 2016, and export prices up 3.1% year-over-year, versus down 0.2% for the 12 months ending November 2016.
Business Inventories decreased 0.1% in October, as expected. The September reading was left unrevised at 0.0%.
The key takeaway from the report is that sales growth is outpacing inventory growth, which is a step toward regaining some pricing power.
On Friday, investors will receive the Empire State Manufacturing Survey for December (Briefing.com consensus 18.0) at 8:30 ET and both Industrial Production (Briefing.com consensus +0.3%) and Capacity Utilization (Briefing.com consensus 77.2%) at 9:15 ET.
Nasdaq Composite +27.4% YTD
Dow Jones Industrial Average +24.0% YTD
S&P 500 +18.5% YTD
Russell 2000 +11.1% YTD
Stocks Slip In Final Minutes, Finish Wednesday Mixed
13-Dec-17 16:30 ET
Dow +80.63 at 24585.43, Nasdaq +13.48 at 6875.80, S&P -1.26 at 2662.85
https://www.briefing.com/investor/markets/stock-market-update/2017/12/13/stocks-slip-in-final-minutes-finish-wednesday-mixed.htm
[BRIEFING.COM] U.S. equities finished mostly higher on Wednesday, but financial shares struggled following the Fed's latest policy directive.
The Dow Jones Industrial Average settled at a new record high for the fourth session in a row, adding 0.3%. The Nasdaq Composite also finished higher, adding 0.2%, but the S&P 500 settled with a slim loss of 0.1%. The benchmark index held a modest gain for much of the day, but fell sharply in the final minutes of trading.
Small caps showed relative strength, pushing the Russell 2000 higher by 0.6%.
As expected, the Federal Open Market Committee raised the fed funds target range by 25 basis points to 1.25%-1.50% on Wednesday, marking the third rate hike of 2017. Chicago Fed President Evans and Minneapolis Fed President Kashkari--the FOMC's two most dovish members--dissented, saying they preferred to keep the target range unchanged.
The Fed's so-called "dot plot" revealed that the median FOMC member still anticipates three rate hikes in 2018 and two in 2019. Both figures were unchanged from the projections released in September, even though the central bank acknowledged that overall inflation and core inflation have declined this year and are running below 2.0%.
U.S. Treasuries rallied in a curve-flattening trade, underpinned by both the Fed's policy statement and a smaller-than-expected increase in the core Consumer Price Index for November (+0.1% actual vs +0.2% Briefing.com consensus). The yield on the benchmark 10-yr Treasury note tumbled five basis points to 2.35%, while the 2-yr yield slipped two basis points to 1.79%.
The flattening of the yield curve weighed heavily on the financial sector, which is second only to technology in terms of weight, representing nearly 15.0% of the broader market. The financial space dropped 1.3%, mitigating gains registered in most other areas.
In total, seven of eleven sectors finished in the green, but gains were limited; no group advanced more than 0.5%.
On the political front, House and Senate Republicans reached an agreement of the final version of a tax reform bill on Wednesday, putting President Trump's first major legislative victory within reach. The full details of the bill will be released later in the week and votes are scheduled to take place in both chambers sometime next week.
Reports indicate that the bill would cut the corporate tax rate to 21%--which is slightly higher than the 20% rate that the GOP was originally shooting for, but still significantly below the current rate of 35%. The new corporate tax rate would take effect in 2018, which is faster than the 2019 start date in the Senate's version of the bill.
It's also worth pointing out that Democrat Doug Jones defeated Republican Roy Moore in a special election for Alabama's open U.S. Senate seat. Mr. Jones' victory will reduce the GOP's majority in the Senate from 52-48 to 51-49, but it is not expected to impact tax reform as Mr. Jones will not take the oath of office for a few weeks.
In corporate news, Caterpillar (CAT 148.57, +5.15) jumped 3.6%, settling at a new record high, after reporting a year-over-year increase of 26% in November machine sales. Target (TGT 62.67, +1.65) also advanced, adding 2.7%, after announcing that it will acquire Shipt, an internet-based grocery delivery service, for $550 million in cash.
Conversely, 21st Century Fox (FOXA 32.75, -1.35) lost 4.0% following reports that a deal with Walt Disney (DIS 107.61, +0.18) could be announced as soon as Thursday. As a reminder, Disney is reported to be interested in acquiring around $60 billion of assets from 21st Century Fox.
Elsewhere, equities had a weak showing in Europe, with the Euro Stoxx 50 moving lower by 0.5%, while the major stock indices in the Asia-Pacific region finished Wednesday mixed. Japan's Nikkei lost 0.5%, while Hong Kong's Hang Seng and China's Shanghai Composite jumped 1.5% and 0.7%, respectively.
Reviewing Wednesday's economic data, which included the November Consumer Price Index and the weekly MBA Mortgage Applications Index:
Total CPI increased 0.4% (Briefing.com consensus +0.4%) in November while core CPI, which excludes food and energy, rose 0.1% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI and core CPI are up 2.2% and 1.7%, respectively.
The key takeaway from the report is that it didn't signal any alarming consumer inflation pressures, which will leave market participants predisposed to think that the Federal Reserve is apt to continue following a gradual tightening path.
The weekly MBA Mortgage Applications Index decreased 2.3% to follow last week's 4.7% increase.
On Friday, investors will receive November Retail Sales (Briefing.com consensus +0.3%), weekly Initial Claims (Briefing.com consensus 239K), and November Export/Import Prices at 8:30 ET, followed by October Business Inventories (Briefing.com consensus -0.1%) at 10:00 ET.
Nasdaq Composite +27.7% YTD
Dow Jones Industrial Average +24.4% YTD
S&P 500 +18.9% YTD
Russell 2000 +12.3% YTD
Financials Fuel Another Positive Day on Wall Street
12-Dec-17 16:20 ET
Dow +118.77 at 24504.80, Nasdaq -12.76 at 6862.32, S&P +4.12 at 2664.11
https://www.briefing.com/investor/markets/stock-market-update/2017/12/12/financials-fuel-another-positive-day-on-wall-street.htm
[BRIEFING.COM] The U.S. equity market had another positive showing on Tuesday, with the S&P 500 and the Dow Jones Industrial Average closing at fresh record highs for the third session in a row.
Tuesday's session was, like Monday's, relatively quiet as investors continued to await the Fed's latest policy directive, which will cross the wires on Wednesday afternoon. The S&P 500 advanced 0.2% with seven of its eleven sectors finishing in positive territory. The Dow did modestly better, adding 0.5%, while the tech-heavy Nasdaq finished with a loss of 0.2%.
The heavily-weighted financial sector climbed 1.0% on Tuesday, extending its December gain to 2.5%--which is more than four times the S&P 500's month-to-date gain of 0.6%. Within the group, Dow component Goldman Sachs (GS 257.68, +7.55) was among the strongest names (+3.0%), helping the Dow Jones Industrial Average outpace its peers.
Finishing at the very top of the sector standings--just one step above the financial group--was the telecom services sector, which rallied 2.8%. Wireless giants AT&T (T 38.10, +1.20) and Verizon (VZ 53.19, +1.35) finished with respective gains of 3.3% and 2.6%. VZ shares were upgraded to 'Buy' at Nomura before the opening bell.
As for the other advancing sectors, none finished with a gain of more than 0.4%.
On the downside, the top-weighted technology sector (-0.3%) settled in negative territory, breaking a five-session winning streak. Chipmakers were particularly weak, evidenced by the 1.0% decrease in the PHLX Semiconductor Index, as was social media giant Facebook (FB 176.96, -2.08), which dropped 1.2%.
In corporate news, Dow component Boeing (BA 289.94, +6.78) announced a 20% increase in its quarterly dividend and a new $18 billion share repurchase program. The news sent the aerospace giant to a new all-time high (+2.4%) and helped fuel the Dow's relatively strong performance.
U.S. Treasuries ended the day mostly lower, but shorter-dated issues managed to eke out slim gains. The 2-yr yield slipped one basis point to 1.81%, while the benchmark 10-yr yield climbed two basis points to 2.40%. The three basis point increase in the 2yr-10yr spread helped fuel the financial sector's positive performance.
Elsewhere, equity indices in the Asia-Pacific region finished Tuesday on a lower note, with China's Shanghai Composite (-1.3%) pacing the retreat, while the Euro Stoxx 50 advanced for the third time in four sessions, adding 0.4%.
Reviewing Tuesday's economic data, which included the November Producer Price Index and the November Treasury Budget:
Producer prices rose 0.4% in November (Briefing.com consensus +0.4%), while core producer prices increased 0.3% (Briefing.com consensus +0.2%). Year-over-year, producer prices are up 3.1% and core producer prices have risen 2.4%.
The key takeaway from the PPI report is that producer prices are rising and will create some profit margin pressures if the higher prices are not passed through to consumers.
The Treasury Budget for November showed a deficit of $138.5 billion (Briefing.com consensus -$134.0 billion) versus a deficit of $136.7 billion for November 2016.
The Treasury Budget data is not seasonally adjusted, so the November deficit cannot be compared to the $63.2 billion deficit registered in October.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET and the November Consumer Price Index (Briefing.com consensus +0.4%) at 8:30 ET. The Fed will release its latest policy directive at 14:00 ET.
Quiet Climb to Fresh Record Highs
11-Dec-17 16:20 ET
Dow +56.87 at 24386.03, Nasdaq +35.00 at 6875.08, S&P +8.49 at 2659.99
https://www.briefing.com/investor/markets/stock-market-update/2017/12/11/quiet-climb-to-fresh-record-highs.htm
[BRIEFING.COM] Equities quietly climbed to new all-time highs on Monday, with technology and energy shares pacing the advance.
The Dow and the S&P 500 added 0.2% and 0.3%, respectively, to finish at new record highs for the second session in a row. The tech-heavy Nasdaq did not rewrite its record mark, but it did outpace its peers with a gain of 0.5%. Conversely, the small-cap Russell 2000 underperformed, losing 0.1%.
Headlines were few and far between on Monday following a quiet weekend and ahead of a handful of central bank policy meetings. The Fed is expected to raise the fed funds target range by 25 basis points on Wednesday, while the European Central Bank and the Bank of Japan, both of which meet on Thursday, are expected to leave their key policy rates unchanged.
Tax reform remained on investors' minds, even though there weren't any new developments of note. Republicans hope to send a finalized bill to the White House before December 22.
The top-weighted technology sector, which comprises nearly a quarter of the broader market, was among the top-performing groups on Monday, settling with a gain of 0.8%. Apple (AAPL 172.67, +3.30) and Microsoft (MSFT 85.23, +1.07) were big contributors, adding 2.0% and 1.3%, respectively.
Energy shares also outperformed, underpinned by an increase in the price of crude oil; West Texas Intermediate crude futures climbed 1.1% to $57.98 per barrel. The energy sector jumped 0.7%, with Dow components Chevron (CVX 120.42, +0.50) and Exxon Mobil (XOM 83.03, +0.37) adding 0.4% and 0.5%, respectively.
It's also worth pointing out that telecoms rallied on Monday, thanks in large part to CenturyLink (CTL 15.87, +1.20), which jumped 8.2% after numerous insiders, including CEO Glen Post, bought a total of 188,500 shares last week.
On the downside, the financials and industrials sectors finished at the bottom of the sector standings, losing 0.2% apiece. Within the financial group, lenders suffered at the hand of another curve-flattening trade in the U.S. Treasury market, which cut the 2yr-10yr spread by two basis points.
The yield on the benchmark 10-yr Treasury note finished flat at 2.39%, while the 2-yr yield climbed two basis points to 1.82%.
Elsewhere, equity indices in the Asia-Pacific region advanced on Monday, with Hong Kong's Hang Seng (+1.1%) leading the charge, while the major European bourses finished mixed. The UK's FTSE showed relative strength, adding 0.8%, while France's CAC and Germany's DAX lost 0.2% apiece.
Also of note, the CBOE launched bitcoin futures trading on Sunday evening. The one-month futures contract was trading at around $18,600 at the stock market's closing bell.
Reviewing Monday's economic data, which was limited to the October Job Openings and Labor Turnover Survey:
The October Job Openings and Labor Turnover Survey showed that job openings decreased to 6.0 million from a revised 6.18 million (from 6.09 million) in September.
On Tuesday, investors will receive two economic reports--the November Producer Price Index (Briefing.com consensus +0.4%) and the November Treasury Budget (Briefing.com consensus -$134.0 billion)--which will be released at 8:30 ET and 14:00 ET, respectively.
Nasdaq Composite +27.7% YTD
Dow Jones Industrial Average +23.4% YTD
S&P 500 +18.8% YTD
Russell 2000 +12.0% YTD
InvestmentHouse Weekend Update:
http://www.investmenthouse.com/frblog.php
- Stocks continue the rebounds, NYSE indices off near support, NASDAQ
continuing its recovery, SOX gives up its gain.
- Jobs report decent, not great, but it is enough for stocks.
- NYSE leadership rebounds, FAANG rallies but closes off highs. All move up
together but NASDAQ, SOX face important tests that will either show buys or
retracements back lower.
-
After playing favorites the past three weeks, toward the end of last week
stocks tried their kumbaya move, i.e. all rising together versus supporting
some and forgetting others. The result was a recovery in NASDAQ and SOX,
but to varying degrees of success.
SP500 14.52, 0.55%
NASDAQ 27.24, 0.40%
DJ30 117.68, 0.49%
SP400 0.39%
RUTX 0.08%
SOX -0.50%
NASDAQ 100 0.45%
VOLUME: NYSE -10%, NASDAQ -6%. Trade backing off on a move higher, not the
best price/volume action. NYSE trade below average, NASDAQ trade below
average for the third straight session (i.e. all three upside days). Again,
not great price/volume action, particularly for NASDAQ on this bounce.
ADVANCE/DECLINE: NYSE 1.5:1, NASDAQ 1.2:1. Nothing stellar, and indeed
somewhat lagging the day's price gains.
The NASDAQ recovery started Wednesday with a gap lower and recovery to
positive. Thursday and Friday continued the rebound with solid enough
gains, though Friday NASDAQ gapped higher then spent the day fading half the
move.
The fuel for the move? Well, the NYSE indices were perfectly set to bounce
after a short pullback to the 10 or 20 day EMA. NASDAQ and SOX were sold
off hard in that sudden rotation turn, and they were a bit overdone near
term and were rebounding through Thursday, showing some upside momentum
returning.
Friday itself saw the EU and UK strike a deal on Brexit to take it to the
'second phase.' Fears were things were not going well (they were not) and
that it might fall apart. Instead, the UK capitulated to blackmail and
struck a 'deal.'
Then there were jobs. It was a good report, not a great report, but it beat
non-farm expectations, manufacturing jobs grew solidly at 31K, wages were
decent, and the workweek improved nicely.
Non-Farms: 228K versus 190K expected versus 247K Oct (from 261K)
Manufacturing: One of the strongest months in a decade.
Workweek: 34.5 versus 34.4 expected versus 34.4 Oct. Could it finally be
that the workweek expands as companies need more work performed? Perhaps --
the PROBLEM is the ACA is still there with its 29 hour/week cap when the
mandates and taxes kick in. Until that changes, change in the workweek
remain likely muted.
Wages: 0.2% versus 0.3% expected versus -0.1% Oct. +2.5% year/year missing
the 2.7% expected.
What's with wages given that better paying manufacturing positions are
becoming more dominant? It could be a seasonal matter. Retail hires
rebounded from a weaker October given it is time to hire for holiday
demands. Those retail jobs are low pay jobs, and with that influx of jobs
that helped drag down the overall wage level.
Again, a good enough report, not great. It was more about the jobs mix and
the hours worked, and a bit of wage improvement. Important details no
doubt.
After the jobs report the futures more than doubled their gains from 49 on
DJ30 to 131 at the morning peak. As Reuben Feffer's (Ben Stiller) boss
(Alec Baldwin) in 'Along Came Polly' would say, good things.
The stock indices all started higher, but all but SP500 and DJ30 closed off
the high. Those two rallied into midday, faded into mid-afternoon, then
sprinted to the close and a higher high.
SP400 midcaps were similar but they could not find the legs for a for a last
hour sprint, instead just hanging on. RUTX peaked midday and faded the rest
of the session.
NASDAQ, NASDAQ 100, and SOX were similar. The first two peaked at the open
and faded the rest of the session. SOX' action was the same, but its
descent was more severe, giving up all of the gains and closing lower.
So, gains yes, but it was not an all-out, damn the torpedoes rush higher.
Most of the NYSE stocks that were up held their moves higher. Many NASDAQ
stocks, including FAANG, closed well off the high and indeed hit their high
on the open or very early and then backed off.
That can mean the recovery moves on NASDAQ and SOX are capping out. It can
also mean that after the reversal session Tuesday and the recovery into
Friday, those stocks need to take a breather after 4 days upside. After
that they can continue on upside, and if so, any little pullback can be used
to pick up positions. Indeed, Friday we took FB off with a trailing stop
because of its action, intending to move back in after it tests with some
better option positions.
Overall the session was solidly decent. High praise indeed, right? But,
after a 4-day recovery by NASDAQ showed some weariness and SOX hitting the
50 day SMA on the open and then flipping negative, solidly decent is not
bad.
NASDAQ and SOX are hardly out of the woods and free to sail higher. SOX
looks extremely problematic right now. NASDAQ, as noted, can take a short
break and continue higher, but it could also be that the rebound from the
sharp selloff has run out of gas. How the leaders respond this week tells
that tale. Again, if we get a nice, short test and a new move in NASDAQ
leaders, we are all over them with more positions.
As it was we picked up some AAP, BIIB and AMZN Friday, took some gain in
PII, and closed TELL and FB. Again, a test by FB to the 50 day MA-ish (176)
that holds and starts up is a new buy. Indeed, a GOOG test of the 20 day
EMA (1022ish), and AMZN looks really good testing the 10 day EMA, one of the
reasons we picked up new positions Friday.
Getting into the last bit of the year, NYSE indices made a test and started
to bounce, looking very good in their trends higher. SOX looks at best
iffy, while NASDAQ, if it just takes a pause or a modest pullback, could
continue with a second move off the selling and challenge for a new high.
After all, it was a nice, orderly test that still held its uptrend even with
the NASDAQ mega caps and FAANG selling sharply, then bounced back upside.
Therefore we continue to look at upside plays even if they are trades on
stocks such as HON that is in a great uptrend but in a routine test. Or
perhaps CVX that broke out then put in a great 10 day EMA last week. DIOD
is possible with a big ABCD at the 78% Fibonacci retracement.
At the same time, SOX and SMH look bearish with failing tests of the 50 day
MA from below. They can set up ABCD patterns and ultimately rally back, but
that means another downside leg in the pattern to establish a D point.
Playing that leg lower is a perfectly legitimate play and can make excellent
money, as long as you know what you are playing.
LEADERSHIP
FAANG: Up for another session then reversing in some cases to losses.
Important pause/test for them this coming week, i.e. can they keep the move
going after a breather, or was that all that was left in the tank? FB
gapped higher, started to sag so we closed the position and will see if it
tests the 50 day or some other support and resets to continue the upside
move. AAPL still looks good to move higher off its downward wedge. AMZN up
on the week, up more Friday but it too closed off its high. GOOG Gapped to
a doji Friday, its fourth upside session. It could pause a bit and test
1025ish and if that holds, that would be a good entry once again.
Financial: Bouncing after tests into midweek. BAC up off the 10 day EMA
Thursday and Friday, JPM showing the same action. GS showing the same
action and indeed we entered last week.
Transports: Same action as the financials, i.e. a test into Wednesday
followed by upside into the weekend. CSX, KSU in rails show this action.
Truckers such as JBHT, ODFL rallied from Wednesday to weekend after their
tests. Airlines showed big moves Thursday, but Friday gave up some good
gains e.g. DAL, AAL, LUV. SAVE managed to hold its gains through Friday.
Chips: Some look great, e.g. MRVL. INTC is at the 50 day MA and looks in
very good position. Others are in position for more downside from the look:
NVDA shows a bear flag. AMAT, LRCX, XLNX show this as well, but after
another drop they could put in an ABCD pattern that would suggest more
upside.
Retail: After a pullback from Tuesday, many started back up Friday, e.g.
COST, AAP, JWN, AZO. Others look ready, just did not move yet, e.g. DDS,
TGT, WMT.
Metals: STLD, RS -- US steel stocks -- ran hard into the weekend. FCX is
very interesting, particularly if it can hold a test.
MARKET STATS
DJ30
Stats: +117.68 points (+0.49%) to close at 24329.16
Nasdaq
Stats: +27.24 points (+0.40%) to close at 6840.08
Volume: 1.82B (-5.7%)
Up Volume: 1.16B (-200M)
Down Volume: 616.9M (+73.55M)
A/D and Hi/Lo: Advancers led 1.22 to 1
Previous Session: Advancers led 1.75 to 1
New Highs: 97 (+21)
New Lows: 49 (-17)
S&P
Stats: +14.52 points (+0.55%) to close at 2651.50
NYSE Volume: 738.5M (-10.20%)
A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Advancers led 1.68 to 1
New Highs: 111 (+31)
New Lows: 29 (-19)
SENTIMENT INDICATORS
VIX: 9.58; -0.58
VXN: 14.42; -1.44
VXO: 8.54; -1.02
Put/Call Ratio (CBOE): 0.94; +0.10
Bulls and Bears: Bulls roared back from the dip a dip 3 weeks back, but
never fell below 60. That is a high level of bulls, suggesting that a lot
of money is already in the market. For now, however, the market still is
moving higher but it is noteworthy SOX is under pressure and the big name
techs, while they did bounce the past week, still have to show they can
recover the prior highs without slipping into a basing/consolidation
process. Why? Because you want the yearend rally to continue and to play
it.
Bulls: 64.2 versus 62.3
Bears: 15.1 versus 15.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 64.2 versus 62.3
62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5 versus 62.3 versus 60.6
versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1 versus 49.5
versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0 versus 60.2
versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5 versus 50.00
versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7 versus 58.5
versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5 versus 56.7
versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8 versus 62.7
versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8
versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0
versus 42.9 versus 41.7 versus 47.1 versus 42.9
Bears: 15.1 versus 15.1
15.1 versus 15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1 versus 15.2
versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2 versus 19.1
versus 19.1 versus 18.3 versus 18.1 versus 17.0 versus 16.2 versus 16.5
versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3 versus 19.2
versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9 versus 18.3
versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3
versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6 versus 17.5
versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2
versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3
versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.378% versus 2.362%. Bonds sold off hard Thursday, held the 20 day
EMA Friday. Sharp bounce, sharp drop. Now we see if bonds rally again and
drop rates.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.378%
versus 2.34% versus 2.353% versus 2.381% versus 2.363% versus 2.363 versus
2.412% versus 2.385% versus 2.326% versus 2.329% versus 2.321% versus 2.34%
versus 2.354% versus 2.367% versus 2.345% versus 2.37% versus 2.336% versus
2.375% versus 2.407% versus 2.402% versus 2.34% versus 2.326% versus 2.316%
versus 2.32% versus 2.332% versus 2.349% versus 2.358% versus 2.378% versus
2.37% versus 2.419% versus 2.456% versus 2.435% versus 2.421% versus 2.366%
versus 2.383% versus 2.318% versus 2.341% versus 2.30% versus 2.302% versus
2.275%
EUR/USD: 1.1764 versus 1.17754. Fell to the 50 day EMA and showing a doji
with tail that might bounce.
Historical: 1.17754 versus 1.17990 versus 1.18276 versus 1.18727 versus
1.18983 versus 1.18976 versus 1.18529 versus 1.18489 versus 1.1899 versus
1.19329 versus 1.18148 versus 1.17402 versus 1.1791 versus 1.1787 versus
1.1786 versus 1.1799 versus 1.16443 versus 1.16646 versus 1.16439 versus
1.15871 versus 1.15954 versus 1.1609 versus 1.16092 versus 1.16575 versus
1.15480 versus 1.1644 versus 1.16091 versus 1.16330 versus 1.18163 versus
1.17570 versus 1.1759 versus 1.17798 versus 1.18476 versus 1.17995 versus
1.1771 versus
USD/JPY: 113.48 versus 113.094. Good bounce on the week, moving through
the 50 day SMA.
Historical: 113.473 versus 112.473 versus 112.554 versus 112.442 versus
112.190 versus 112.55 versus 112.102 versus 111.583 versus 111.244 versus
111.523 versus 111.247 versus 112.349 versus 112.615 versus 112.124 versus
112.91 versus 112.879 versus 113.430 versus 113.615 versus 113.526 versus
113.379 versus 113.99 versus 113.723 versus 113.758 versus 114.064 versus
114.010 versus 114.010 versus 113.845 versus 113.640 versus 113.175 versus
113.675 versus 114.071 versus 113.607 versus 113.913 versus 113.31 versus
113.530 versus 112.561 versus 113.031 versus 112.21 versus 112.20 versus
111.852
Oil: 57.36, +0.67. Broke lower Wednesday, recovered the 20 day EMA nicely
to end the week, still trending higher.
Gold: 1248.40, -4.70. Broke through the 200 day SMA early week the really
broke lower Thursday. Friday a bit lower, showing a doji.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6840.08
Resistance:
6914 is the late November all-time high
Support:
6796 is the early November 2017
The 50 day EMA at 6705
6641 is the October high
The 2016 trendline at 6565
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 200 day SMA at 6295
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2651.50
Resistance:
Support:
The 20 day EMA at 2616
2597 is the November 2017 all-time high
The 50 day EMA at 2581
2549 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
2480 the late August and early August highs
The 200 day SMA at 2461
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 24,329.16
Resistance:
24534 is the all-time high
Support:
23,602 is the early November 2017 high
The 20 day EMA at 23,875
23,608 is the early November high
The 50 day EMA at 23,404
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
The 200 day SMA at 21,846
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
Modest Gains Leave Stocks at Record Highs
08-Dec-17 16:30 ET
Dow +117.68 at 24329.16, Nasdaq +27.24 at 6840.08, S&P +14.52 at 2651.50
[BRIEFING.COM] U.S. stocks finished the week on a positive note, helped by a favorable Employment Situation Report for November.
Both the S&P 500 and the Dow settled at new all-time highs, adding 0.6% and 0.5%, respectively. The Nasdaq finished slightly behind its peers, adding 0.4%, while the small-cap Russell 2000 showed relative weakness, finishing with a gain of just 0.1%. For the week, the S&P 500 advanced 0.4%.
The Employment Situation Report for November showed strong job growth and subdued wage growth, keeping in line with recent trends. Nonfarm payrolls increased more than expected (228K actual vs 190K Briefing.com consensus), average hourly earnings rose less than expected (+0.2% actual vs +0.3% Briefing.com consensus), and the unemployment rate stayed at 4.1%.
In short, the report isn't likely to keep the Fed from raising rates at next week's meeting, but it could give the Fed a cause for pause going into 2018.
A positive vibe from overseas equity markets also contributed to the upbeat sentiment on Wall Street. Stocks in the Asia-Pacific region finished Friday broadly higher as investors rallied around China's better-than-expected November trade surplus (+$40.21 billion actual vs +$35.00 billion expected). Japan's Nikkei added 1.4%, finishing flat for the week.
Elsewhere, the Euro Stoxx 50 settled with a gain of 0.6% after the UK and the European Union reached an agreement on Brexit divorce terms. Britain will pay as much as GBP39 billion to complete the separation and there will be no hard border between Ireland and Northern Ireland. Talks will now turn to future trade relations.
In addition, Congress' decision to pass a two-week stopgap spending bill, which delayed an impending government shutdown, helped underpin Friday's advance.
The S&P 500's telecom services sector (+1.5%) was the top-performing group, followed from a distance by the heavily-weighted health care space (+1.1%). Within the health care group, biotech names showed particular strength, sending the iShares Nasdaq Biotechnology ETF (IBB 106.07, +2.02) higher by 1.9%.
Alexion Pharmaceuticals (ALXN 114.46, +7.68) paced the biotech rally, jumping 7.2%, after the New York Times reported that activist hedge fund Elliot Management has urged the biotech company to do more to lift its stock price. Celgene (CELG 106.09, +3.36) also outperformed, adding 3.3%, after Atlantic Equities upgraded its shares to 'Overweight.'
In total, ten of eleven sectors finished Friday's session in positive territory, with the lightly-weighted materials space (unch) being the lone laggard.
Outside the equity market, U.S. Treasuries finished mostly flat, with the benchmark 10-yr yield closing unchanged at 2.38%, while the U.S. Dollar Index ticked up 0.1% to 93.88. West Texas Intermediate crude futures jumped 1.1% to $57.30 per barrel, but still finished the week lower by 1.8%.
Reviewing Friday's economic data, which included the Employment Situation Report for November, the preliminary reading of the University of Michigan Consumer Sentiment Index for December, and October Wholesale Inventories:
Employment Situation Report
November nonfarm payrolls increased by 228,000 while the Briefing.com consensus expected an increase of 190,000. The prior month's increase was revised to 244,000 from 261,000. Nonfarm private payrolls rose by 221,000 while the Briefing.com consensus expected an increase of 170,000. The previous month's increase was revised to 247,000 from 252,000.
The unemployment rate stayed at 4.1% (Briefing.com consensus 4.1%). Average hourly earnings increased by 0.2% (Briefing.com consensus +0.3%), while the previous month's reading was revised to -0.1% from 0.0%. The average workweek was reported at 34.5 (Briefing.com consensus 34.4). The previous month's reading was left unrevised at 34.4.
The key takeaway from the report is that wage growth remains subdued. That isn't likely to keep the Fed from raising rates at this month's meeting, yet it could give the Fed a data-based reason to move more slowly on the next rate hike in 2018.
University of Michigan Consumer Sentiment:
The preliminary reading of the University of Michigan Consumer Sentiment Index for December declined to 96.8 (Briefing.com consensus 98.8) from 98.5 in November.
The key takeaway from the report is that consumers continue to remain upbeat about current economic conditions, with higher income expectations feeding their optimism. As an aside, there was also a jump in consumers' inflation expectations for 2018.
Wholesale Inventories
October Wholesale Inventories decreased 0.5% (Briefing.com consensus -0.4%). The September reading was revised to +0.1% from +0.3%.
The key takeaway from the report is that the sales increase outpaced the inventory increase by a sizable margin, which is a step in the right direction for wholesalers trying to regain some pricing power.
On Monday, investors will receive just one economic report--the October Job Openings and Labor Turnover Survey--which will be released at 10:00 ET.
Nasdaq Composite +27.1% YTD
Dow Jones Industrial Average +23.1% YTD
S&P 500 +18.4% YTD
Russell 2000 +12.1% YTD
Week In Review: Waiting on Washington
Equities ticked higher this week as investors geared up for an end-of-year showdown in Washington.
The S&P 500 and the Dow Jones Industrial Average both advanced 0.4%, closing Friday's session at fresh record highs, while the tech-heavy Nasdaq underperformed, losing 0.1%. Small caps struggled this week, pushing the Russell 2000 lower by 1.0%.
Investor sentiment was upbeat at Monday's opening bell after the U.S. Senate passed its version of a tax reform bill over the weekend, allowing the GOP to enter the final stretch of its quest to rewrite the tax code. House and Senate Republicans are hoping to reach an agreement on a final bill and pass said bill in their respective chambers before December 22.
In addition to the GOP's self-imposed tax reform deadline, December 22 is the new end date for government funding after Congress agreed to a two-week stopgap spending bill on Thursday evening. The risk of a government shutdown was on investors' minds throughout the week, helping to keep the bulls in check.
With the legislative agenda for the rest of the year virtually set, investors appeared to be in wait-and-see mode for much of the week, taking some profits and readjusting their portfolios. However, the Employment Situation Report for November, which was released on Friday, helped equities finish the week on a positive note.
The Employment Situation Report for November showed a larger-than-expected increase in nonfarm payrolls (228K actual vs 190K Briefing.com consensus) and a smaller-than-expected rise in average hourly earnings (+0.2% actual vs +0.3% Briefing.com consensus).
In other words, job growth has remained strong while wages--which are positively correlated with inflation--have remained relatively subdued. This combination has proven to be highly beneficial for the stock market as it points to steady economic growth but leaves out the inflationary concerns that typically accompany said growth.
The S&P 500's eleven sectors finished the week mixed, with seven settling in the green and four closing in the red. The financial sector was the top performer, adding 1.5%, followed closely by the industrial group (+1.4%). Within the industrial space, transports showed particular strength, pushing the Dow Jones Transportation Average higher by 2.1%.
On the downside, the energy sector lost 0.7% amid a decrease in the price of crude oil; West Texas Intermediate crude futures declined 1.8% to $57.30 per barrel. The utilities space (-1.0%) also struggled as energy providers like Edison (EIX) faced outages due to wild fires in Southern California; EIX shares lost 11.1% for the week.
Corporate news was pretty light this week, but it's worth noting that CVS Health (CVS) acquired health insurer Aetna (AET) for $207 per share in cash and stock. That price represents a premium of about 29% to where Aetna shares were trading before the Wall Street Journal reported that the companies were in talks in October.
Looking ahead, the Fed is widely expected to announce a rate hike of 25 basis points next week, which would bring the fed funds target range to 1.25%-1.50%.
Modest Gains Ahead of Friday's Jobs Report
07-Dec-17 16:25 ET
Dow +70.57 at 24211.48, Nasdaq +36.47 at 6812.83, S&P +7.71 at 2636.98
https://www.briefing.com/investor/markets/stock-market-update/2017/12/7/modest-gains-ahead-of-fridays-jobs-report.htm
[BRIEFING.COM] U.S. equities recouped some of the losses registered earlier in the week on Thursday, with industrial shares pacing the advance.
The S&P 500 added 0.3%, as did the Dow Jones Industrial Average, while the tech-heavy Nasdaq Composite outperformed, climbing 0.5%. Small caps showed relative strength, pushing the Russell 2000 higher by 0.8%. The S&P 500 will enter Friday's session with a week-to-date loss of 0.2%.
A Friday night deadline to secure government funding kept investors on their toes on Thursday. Lawmakers are expected to agree to a short-term extension that would fund the government for another two weeks, perhaps giving the GOP just enough time to pass its tax reform bill before having to take up the issue again.
President Trump met with congressional leaders on Thursday afternoon to discuss the issue, but no agreement was announced.
Separately, Bloomberg reported that the White House plans to release its long-promised infrastructure plan in early January. The report helped support the S&P 500's industrial sector (+0.9%), which was already strong amid another transport rally; the Dow Jones Transportation Average finished higher by 1.3%.
The top-weighted technology sector (+0.7%) also outperformed on Thursday, with Facebook (FB 180.14, +4.08) and Alphabet (GOOG 1030.93, +12.55) jumping 2.3% and 1.2%, respectively. Chipmaker Broadcom (AVGO 263.89, 0.00) started off strong after reporting upbeat quarterly earnings, but finished at its unchanged mark.
In total, nine of eleven sectors settled in the green, with the consumer staples sector (-0.9%) being the only group to finish with a sizable loss. Within the sector, Dow components Procter & Gamble (PG 90.10, -1.15) and Coca-Cola (KO 45.78, -0.67) dropped around 1.3% apiece.
U.S. Treasuries were flat through much of the session but eventually finished below their unchanged marks, with longer-dated issues showing particular weakness. The yield on the benchmark 10-yr Treasury note jumped five basis points to 2.38%, while the 2-yr yield climbed just one basis point to 1.81%.
Elsewhere, equities indices in the Asia-Pacific region settled Thursday mixed--with Japan's Nikkei (+1.5%) showing relative strength and China's Shanghai Composite (-0.7%) showing relative weakness--while the Euro Stoxx 50 jumped 0.4%.
Reviewing Thursday's economic data, which was limited to weekly Initial Jobless Claims and October Consumer Credit:
The latest weekly initial jobless claims count totaled 236,000, while the Briefing.com consensus expected a reading of 240,000. Today's tally was below the unrevised prior week count of 238,000. As for continuing claims, they declined to 1.908 million from a revised count of 1.960 million (from 1.957 million).
The initial claims report has been glossed over by market participants who have their labor market sights set on the November Employment Situation report, which will be released before the open on Friday.
The October Consumer Credit Report showed an increase of $20.5 billion (Briefing.com consensus +$17.0 billion). The September credit growth was revised to $19.2 billion from $20.8 billion.
The Employment Situation Report for November (Briefing.com consensus +190,000) will be released at 8:30 ET on Friday, followed by the 10:00 ET release of October Wholesale Inventories (Briefing.com consensus -0.4%) and the preliminary reading of the University of Michigan Consumer Sentiment Index for December (Briefing.com consensus 98.8).
Nasdaq Composite +26.6% YTD
Dow Jones Industrial Average +22.5% YTD
S&P 500 +17.8% YTD
Russell 2000 +12.0% YTD
Flat Finish Despite Tech Bounce Back
06-Dec-17 16:25 ET
Dow -39.73 at 24140.91, Nasdaq +14.16 at 6776.36, S&P -0.30 at 2629.27
https://www.briefing.com/investor/markets/stock-market-update/2017/12/6/flat-finish-despite-tech-bounce-back.htm
[BRIEFING.COM] Equity indices finished roughly flat on Wednesday despite strength in technology shares.
The S&P 500 finished a tick below its unchanged mark, extending its losing streak to four sessions in a row. Meanwhile, the Dow Jones Industrial Average lost 0.2% and the tech-heavy Nasdaq added 0.2%. Small caps underperformed in the midweek session, pushing the Russell 2000 lower by 0.5%.
The top-weighted technology sector was a focal point on Wednesday as technology shares, which have paced this year's rally, have recently fallen victim to an end-of-the-year sector rotation; the tech space lost 2.6% last Wednesday and another 1.9% on Monday.
In addition, the group disappointed with its performance on Tuesday as it failed to protect a solid opening gain.
Nevertheless, the technology sector did not disappoint on Wednesday. The group opened relatively flat, but strengthened throughout the session to finish with a gain of 0.8%. Heavyweights like Facebook (FB 176.06, +3.23), Alphabet (GOOG 1018.38, +13.23), and Microsoft (MSFT 82.78, +1.19) added between 1.3% and 1.9%.
However, it's worth noting that Apple (AAPL 169.01, -0.63) struggled (-0.4%), finishing lower for the fifth session in a row.
The consumer staples (+0.6%), utilities (+0.4%), real estate (+0.2%), and industrials (+0.1%) groups also finished Wednesday in the green, but losses from the health care (-0.1%), financials (-0.3%), consumer discretionary (-0.5%), materials (-0.6%), telecom services (-1.0%), and energy (-1.3%) sectors roughly balanced the gains.
Energy shares showed particular weakness as the price of crude oil fell to its lowest level in more than two weeks; West Texas Intermediate crude futures tumbled 2.9% to $55.95 per barrel. On a related note, the Department of Energy reported that U.S. crude stockpiles decreased by 5.6 million barrels last week, while the consensus estimate expected a draw of 2.5 million barrels.
Corporate news didn't have much impact at the macro level, but it did cause some notable movement in individual stocks.
DaVita (DVA 69.20, +8.27) jumped 13.6% after agreeing to sell its DaVita Medical Group unit to UnitedHealth's (UNH 219.94, -0.15) Optum for approximately $4.9 billion in cash. Vera Bradly (VRA 11.03, +2.39) surged 27.7% after reporting above-consensus earnings and issuing upbeat profit guidance for the holiday season.
In the bond market, U.S. Treasuries rallied on Wednesday, sending yields lower across the curve. The yield on the benchmark 10-yr Treasury note dropped three basis points to 2.33%, while the 2-yr yield also lost three basis points, settling at 1.80%.
Elsewhere, European equities finished the midweek session mixed, while the major Asian indices moved broadly lower. Japan's Nikkei dropped 2.0%, marking its biggest one-day drop since March, while Hong Kong's Hang Seng lost 2.1%, which is its worst one-day decline in 13 months.
Reviewing Wednesday's batch of economic data, which included the ADP Employment Change Report for November, the revised readings for third quarter Productivity and Unit Labor Costs, and the weekly MBA Mortgage Applications Index:
The ADP National Employment Report showed an increase of 190,000 in November (Briefing.com consensus 190,000). The October reading was left unrevised at 235,000.
The ADP reading precedes Friday's more influential Employment Situation Report for November (Briefing.com consensus +190K).
Third quarter unit labor costs were revised downward to -0.2% (Briefing.com consensus +0.2%) from +0.5% in the preliminary reading. Meanwhile, second quarter productivity was left unrevised at 3.0% (Briefing.com consensus +3.3%).
The key takeaway from the report is that the productivity increase was the largest since the third quarter of 2014, yet labor costs continue to be subdued.
The weekly MBA Mortgage Applications Index increased 4.7% to follow last week's 3.1% decrease.
On Thursday, investors will receive November Challenger Job Cuts at 7:00 ET, weekly Initial Claims (Briefing.com consensus 240K) at 8:30 ET, and October Consumer Credit (Briefing.com consensus $17.0 billion) at 15:00 ET.
Nasdaq Composite +25.9% YTD
Dow Jones Industrial Average +22.2% YTD
S&P 500 +17.4% YTD
Russell 2000 +11.2% YTD
Broad Weakness Overpowers Tech Outperformance
05-Dec-17 16:20 ET
Dow -109.41 at 24180.64, Nasdaq -13.15 at 6762.20, S&P -9.87 at 2629.57
https://www.briefing.com/investor/markets/stock-market-update/2017/12/5/broad-weakness-overpowers-tech-outperformance.htm
[BRIEFING.COM] The S&P 500 (-0.4%) slipped for the third session in a row on Tuesday, with 10 of its 11 sectors finishing in the red.
For a while, it appeared that a bounce-back performance from the top-weighted technology sector, which dropped 1.9% on Monday, might be enough to overpower losses from most other groups. However, the sector weakened as the day wore on, finishing with a modest gain of just 0.2%.
At their best marks of the day, the tech sector held a gain of 1.4%, and the tech-heavy Nasdaq Composite--which ended lower by 0.2%--held a gain of 0.9%.
Meanwhile, the Dow Jones Industrial Average and the small-cap Russell 2000 finished lower by 0.5% and 1.0%, respectively.
As for the other ten sectors, losses ranged from 0.2% to 1.8%. The lightly-weighted telecom services group (-1.8%) finished at the bottom of the sector standings, trimming gains from a largely uninterrupted three-week rally; the group advanced 13.2% from November 14 to December 4.
The utilities sector also showed relative weakness, losing 1.2%, with Edison (EIX 70.00, -10.26) being the group's worst-performing component. The energy provider dropped 12.8% after announcing that more than 260,000 customers in Southern California had lost power due to a fast-moving wildfire in the Ventura County area.
Retailers weighed on the consumer discretionary sector (-0.8%), evidenced by the 1.0% decrease in the SPDR S&P Retail ETF (XRT 44.07, -0.45), while transports led the industrial sector lower by 0.9%; the Dow Jones Transportation Average lost 1.4%, reducing its six-session gain to 6.6%.
Also of note, the heavily-weighted financial sector lost 0.6% amid yet another curve-flattening trade in the bond market.
U.S. Treasuries finished Tuesday's session mixed, cutting the 2yr-10yr spread by five basis points. The yield on the benchmark 10-yr Treasury note slipped three basis points to 2.35%, while the 2-yr yield climbed two basis points to 1.83%. Yields move inversely to prices.
Elsewhere, equities slipped in Asia and Europe, with Hong Kong's Hang Seng (-1.0%) and France's CAC (-0.3%) showing relative weakness in their respective regions.
Reviewing Tuesday's economic data, which included the ISM Services Index for November and the Trade Balance for October:
The ISM Services Index for November declined to 57.4 (Briefing.com consensus 59.3) from an unrevised reading of 60.1 in October.
The key takeaway from the report is that business activity in the non-manufacturing sector is still expanding, but at a somewhat slower rate that is still consistent with 3.0%+ real GDP growth.
The October trade balance showed a deficit of $48.7 billion (Briefing.com consensus -$47.4 billion). The September deficit was revised to $44.9 billion from $43.5 billion.
The key takeaway from the report is that trade will be accounted for as a negative input in fourth quarter GDP models considering that the real trade deficit of $65.3 billion is 5.3% higher than the third quarter average real trade deficit of $62.0 billion.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET, the ADP Employment Change Report for November (Briefing.com consensus 190K) at 8:15 ET, and the revised readings for third quarter Productivity (Briefing.com consensus +3.3%) and Unit Labor Costs (Briefing.com consensus +0.2%) at 8:30 ET.
Nasdaq Composite +25.6% YTD
Dow Jones Industrial Average +22.4% YTD
S&P 500 +17.5% YTD
Russell 2000 +11.8% YTD
A Mixed Monday
04-Dec-17 16:25 ET
Dow +58.46 at 24290.05, Nasdaq -72.22 at 6775.35, S&P -2.78 at 2639.44
https://www.financialsense.com/jill-mislinski/we-are-now-tech-bubble-territory
[BRIEFING.COM] The major stock indices ended Monday mixed as weakness in technology and health care shares limited the impact of gains elsewhere.
Equities opened the day at record highs, but technology shares moved sharply lower soon thereafter. The Dow (+0.2%) still managed to settle at a new all-time high but, like its peers, finished near its lowest mark of the day. The S&P 500 (-0.1%) held a gain until the very end, while the tech-heavy Nasdaq (-1.1%) was weak throughout the session.
At their best marks of the day, the Dow, S&P 500, and Nasdaq held gains of 1.3%, 0.9%, and 0.8%, respectively.
Six of eleven sectors finished the session in positive territory, with all six adding at least 0.8% apiece--financials (+1.6%), consumer discretionary (+1.2%), industrials (+0.8%), materials (+1.0%), consumer staples (+0.9%), and telecom services (+1.6%). The prospect of tax reform largely fueled the broad strength.
The U.S. Senate passed its version of a tax reform bill over the weekend, placing the GOP one step closer to fulfilling its promise of the largest tax overhaul in more than 30 years. Lawmakers will now attempt to reconcile the Senate's version with the version the House passed a few weeks back--a process Republicans are hoping to complete by Christmas.
In addition, a correction to a report that ABC released on Friday also acted as a bullish catalyst. The news agency originally reported that President Trump asked Michael Flynn to contact the Russians during his presidential campaign but later edited that statement, saying the request was made after Mr. Trump had already won the election.
Within the consumer discretionary group, Dow component Walt Disney (DIS 110.22, +4.97) jumped 4.7% following a Wall Street Journal report that the company has restarted talks to acquire assets from 21st Century Fox (FOXA 33.09, +0.90), and retailers sent the SPDR S&P Retail ETF (XRT 44.52, +1.00) higher by 2.3%.
In the industrial space, transports also showed particular strength, evidenced by the Dow Jones Transportation Average (+1.8%), which closed at a new record high.
However, the impact of the aforementioned gains was largely mitigated by the top-weighted technology sector, which fell to profit taking at the tail end of an impressive year. The group dropped 1.9%--marking the second time in less than a week it has lost more than 1.0% in a day--but still remains the year's top-performing sector with a year-to-date gain of 33.5%.
For comparison, the S&P 500 has added 17.9% year to date, and the second-best performer--financials--is up 20.0%.
The heavily-weighted health care sector also did some damage on Monday, losing 1.2%. Within the space, health insurer Aetna (AET 178.70, -2.61) lost 1.4% after announcing it will be acquired by CVS Health (CVS 71.69, -3.43) for $207 per share in cash and stock. CVS shares tumbled 5.0%.
In the bond market, U.S. Treasuries moved lower in another curve-flattening trade that reduced the 2yr-10yr spread by two basis points. The yield on the benchmark 10-yr Treasury note climbed two basis points to 2.38%, while the 2-yr yield jumped four basis points to 1.81%.
Elsewhere, equities in Europe finished Monday broadly higher, with the Euro Stoxx 50 adding 1.5%, while indices in the Asia-Pacific region settled mixed. Brexit negotiations have reportedly stalled due to differences over the Irish border, which divides the Republic of Ireland (EU member) and Northern Ireland (part of the UK).
Reviewing Monday's economic data, which was limited to October Factory Orders:
The Factory Orders Report for October showed a decrease of 0.1% (Briefing.com consensus -0.4%), while the September increase was revised to 1.7% from 1.4%.
The key takeaway from the report is that business spending is increasing to help drive stronger GDP growth.
On Tuesday, investors will receive just two economic reports--the October Trade Balance (Briefing.com consensus -$47.4 billion) and November ISM Services (Briefing.com consensus 59.3). The two pieces of data will be released at 8:30 ET and 10:00 ET, respectively.
Nasdaq Composite +25.9% YTD
Dow Jones Industrial Average +22.9% YTD
S&P 500 +17.9% YTD
Russell 2000 +12.9% YTD
InvestmentHouse - ABC Misreporting Aids a Huge Selloff (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- An avoidable firestorm: ABC misreporting aids a huge selloff.
- Stocks recover as the dip is bought, but close negative.
- Senate tax sausage making hard for the market to watch, ABC broke the
back -- for Friday.
- Afterhours ABC changes the crux of its story, Senate passes tax reform
bill
- Rotation produces some new potential leaders.
- FAANG, other NASDAQ large caps at an important juncture. A September-like
recovery or not?
- Perhaps a 'normal' market week ahead with 'just' the jobs report?
-
Anything But Correct. Altogether Biased Coverage. American Broadcasting
Charlatans. ABC and its reporter Brian Ross should be held liable for
covering any losses any investor or trader suffered Friday. During the
session Mr. Ross reported that 'candidate Trump' ordered Michael Flynn to
contact Russia. On the heels of Flynn being charged and pleading guilty in
a deal that was dependent upon 'others being prosecuted,' that news appeared
to jeopardize Trump and his administration.
Stocks dove lower with DJ30 -350 points on the low, NASDAQ off a whopping
136 points (2%), RUTX -3%. That sent DJ30 to the 10 day EMA, NASDAQ below
the 20 day EMA, and RUTX all the way to the 50 day EMA.
Then the market seemed to sense something was not right. Bids returned,
massive recoveries ensued, and while all of the indices still closed
negative on the day, the losses were pikers compared to the bloodletting
that peaked at 11:30ET.
SP500 -5.36, -0.20%
NASDAQ -26.38, -0.38%
DJ30 -40.76, -0.17%
SP400 -0.24%
RUTX -0.46%
SOX -1.09%
NASDAQ 100 -0.43%
VOLUME: NYSE -33%, NASDAQ -6.5%. Lower trade yes, but still impressive
trade on a rebound. Volume jumped on the ABC report but was strong as well
as stocks bottomed and reversed the 40 minutes after hitting bottom. Again,
there was buying once the kneejerk, algo-driven headline reaction was
thought through.
ADVANCE/DECLINE: NYSE 1.1:1, NASDAQ -1.5:1. Again NASDAQ lags the NYSE
indices.
Late Friday, hours after the financial markets closed for the weekend, ABC
put Brian Ross live on the air. To give further damning detail to his prior
report? NO! To RETRACT the single most important aspect of the report, the
one piece of information that differed from what we all knew for more than a
year: it was not candidate Trump or anyone in his administration, but the
newly elected administration that sought contact with Russia. Specifically,
Ross changed his earlier report to say "candidate Trump asked him [Flynn]
during the campaign to FIND WAYS to repair relations with Russia and other
hot spots, and then after the election, the President-elect asked him, told
him to CONTACT Russia on issues, including working together to fight ISIS."
Oh, just a small oversight there. Therefore, when the balance of the
reporting Friday is reckoned and measured, nothing new was added to what was
known 12 months ago, i.e. that the newly elected administration, as is the
case for all new administrations, started reaching out and making contacts
with key members of other governments so they could hit the ground running
on inauguration day. How shocking. How against the interest of Americans.
Just as Presidents Obama, Bush, Clinton, Bush, etc. acted against the
interest of Americans when they, as Presidents-elect, reached out to foreign
governments to get the relations started in advance of taking office. We
were all grateful they did and felt it was part of getting ready for the
most important job in the world.
Goodness, we have learned in the intervening months that Russia,
post-election, was buying Facebook ads to try and sew seeds of discord in
the US to make the Trump administration LESS effective. It saw in Trump a
Ronald Reagan figure that would not put up with BS, and Russia is,
shockingly I know, trying to get ahead of the curve, actually using what it
learned from the history of the USSR dealing with a personality such as
Trump's. It would appear that Russia has been successful in that endeavor
given how readily US citizens are to attack one another.
Back to the markets. They dove on a combination of stories regarding the
administration that appeared worse than they were. On top of that, they
were already rattled by what appeared to be a sure thing tax reform bill in
the Senate get scuttled when more utterly BS Senate rules got in the way of
common sense. In reality, it was a ploy by the Corkscrew/Korkers sub-party
of newly found anti-deficit religious zealots -- reformed -- to keep tax
reform from passing.
That was a powerful 1-2-3 punch to the market psyche, and the already
rattled indices fell all over themselves. But, as noted, the sense was the
reporting was not correct. Also, a few senators, including Johnson (got
some pass-through amendments he wanted), Collins (got whatever she wanted;
still cannot figure out what that was), gave thumbs up to the tax bill.
Stocks then recovered and pared the losses as noted.
On the heels of the Abysmal Background Checking network's
retraction-but-not-called-retraction of its story, the Senate passed its
bill late, late night. Not sure what the heck is in it -- heard they were
handwriting parts of it on scraps of paper -- but it is passed and now the
House and Senate go to the next level of war, reconciliation. It is
apparently beneficial enough for CNBC to print a story titled "This tax plan
will spark an investment boom that will benefit everyone." Of course it was
penned by Larry Kudlow . . .
So, after Mr. Toad's wild ride induced as a result of some very
self-centered and goal-seeking reports and actions, the market got what it
anticipated: the senate passing a tax reform package. It may not have
anticipated the ABC retraction, but it also didn't anticipate the ABC
fabricated or at the very least poorly, poorly fact-checked story. Usually
when you rush to judgment you end up being the more harshly judged.
Now we see how the markets react to everything being pretty status quo
before all of the running in place that occurred in the very short span of
Friday. You also watch to see if the big NASDAQ stocks pull a September,
and after a sharp down session as on Wednesday, they get purchased yet again
along with other stocks. They based during the summer, broke out of new
bases and rallied, tested, and started back up when all of this started
hitting. Again, will they resume the breakout moves after this pretty big
Wednesday speed bump?
Don't forget about the semiconductors either. Tough week with a sharp drop,
but as noted in last weekend's report, they were extended with a long run up
the 10 day EMA and no inkling of a 50 day EMA test since last touched in
late August. Well, they have not put in that touch, falling to it on
Wednesday, holding it Thursday, undercutting it Friday, then recovering with
a big doji with tail right on top of the 50 day. Quite the shakeout move.
THE MARKET
CHARTS
SOX: Let's start with SOX. A leader upside turned leader downside. 22%
above its 200 day SMA on the high heading into last week. That was
corrected as of Friday all the way back to 11% at the low. Halved the
extension. Now, if the uptrend is to hold what should happen is a new
bounce and new rotation up the 10 and 20 day EMA. Stocks and indices will
breakout, rally up the 10/20 day EMA 4 to 5 rotations or bounces, then
correct back to the 50 day MA where they reset the move and do it again.
SOX broke out of a 4 month base in mid-September and rallied up the 10 day
EMA afterward, putting in the full 5 bounces. It ran out of gas and fell,
but it has hit the 50 day, showing a big doji with tail. Again, if the move
is going to continue with some strength, it should hold and start a new move
here.
NASDAQ: A lot of headlines on the week because the mega caps and FAANG were
down. The chart, however, shows a 20 day EMA test with an intraday
undercut, just as it did in late October and mid-November on the first and
second tests of that level after the mid-September breakout from its late
July to mid-September base. As with SOX, it has another bounce or two ahead
of it if the status quo remains, and as of the Anything goes Broadcast
Crapola story retraction and curmudgeon-defying senate passage of a tax
reform bill (and there is truly some tax reform in that bill), the status
quo remains.
DJ30: Yes the Dow was off 350 points Friday, but it was up 330+ points
Thursday. Moreover, it recovered 310 of the lost points intraday. Huge
surge higher on the week, even more extended (11%) over the 200 day SMA. It
CAN get to 15% extension before it starts to struggle, but that is rarer.
As you can see, it was primed for a pullback Friday with the ease in which
it gave up the Thursday gains. Again, however, it did recover.
RUTX: What a new breakout move Tuesday that coasted a bit higher into
Thursday. Then the Friday jolt sent the small caps all the way back to the
50 day EMA intraday. With the last-minute tax bill blockade attempts that
paired 'I have always been a deficit hawk since Trump was elected' Corkster
with his buddy Schumer when they aided the prior administration more than
doubling the debt, it is no wonder the tax sensitive small caps seized up
and plummeted. They too recovered vast amounts of lost ground to close, and
leave themselves in still good position to continue onward toward the 127%
Fibonacci extension at 1558 (closed at 1537) after bouncing off the 38%
Fibonacci retracement mid-November.
SP400: Massive Friday drop as well, tapping the 20 day EMA from a new
all-time high Thursday. Then the same massive recovery to hold its
breakout. Breakout, shakeout, all in 24 hours. Impressive breakout indeed,
and a test of the move is not at all abnormal.
SP500: New high Thursday, tested almost to the 20 day EMA Friday, recovered
to almost flat by the close. Broke out on a new leg higher 8 sessions back,
very strong Tuesday to Thursday move, and as with SP400, a test would not be
out of the question.
LEADERSHIP
Friday some of the recent leaders in retail, manufacturing, transportation
tested their moves. They recovered off the lows, but were due for a bit of
a test after at least 3 good sessions upside. May get some entries out of
them this week.
Retail: Some testing after good moves though COST, M added gains. JWN,
ROST, TGT put in modest tests while WMT continues its 2 week lateral flag.
HD strong all week. They paused some but for most they held their gains
nicely.
Transports: Most paused. Rails saw KSU, NSC test, but CSX continued its
break higher. Some interesting tests in trucking, e.g. JBHT after a good
break higher. WERN barely tested, same with ODFL. Airlines tested, barely
as well: LUV, SAVE. The DJ20 new high along with the DJ30 new high still
has Dow Theory working even as many with fear of flying forget about that
confirmation indication simply because they have a fear of flying.
Drugs/Biotechs/Healthcare: Trying to come around again. PFE broke higher
early week, MYL at the end of the week. Generics bounced on AMZN showing
interest. Healthcare plans also moved with UNH surging early week. LH is
testing the huge Wednesday move and may give us the entry after a bit more
testing. VSTM looks good even though it gave up its gap higher Friday.
PTLA gave us the entry. IMGN and some other smaller names are interesting.
Manufacturing/Machinery: MMM gave us the target Thursday, took Friday off.
HON surged on the week, also took Friday off. CAT showed a solid new break
higher Thursday, did not give it back.
Oil: Some good moves continued and started. SM popped Friday and we moved
in. SN continued its Thursday move, indeed accelerating the surge for us.
CVX, XOM and other big names paused some Friday after their strong Wednesday
moves. PTEN, SWN may be setting up for new moves or breaks higher,
respectively.
Financial; Strong Tuesday and Wednesday moves, then took Thursday and Friday
as personal days. Great recovery moves and we will see if we can get any
new entries off this. TCBI testing nicely as is STT. BAC looks great still
and C could now give the entry.
Semiconductors: With SOX SMH showing a possible shakeout at the 50 day MA,
some stocks should be setting up after a rough week. LRCX and AMAT are
still well below the 50 day EMA and at the 78% and 61% Fibonacci
retracement, respectively. More work to be done to form a pattern there.
AVGO held up well, reaching lower but recovering to the 20 day EMA to close
yet again. QRVO reached down toward the 200 day SMA but did manage a
recovery; work to do now to get set back up. INTC looks good. CAVM as
well. Many, however, have a lot of work to do to rebuild patterns.
FAANG: Have to look at these of course. Still in the hanging on stage
after the Wednesday drop, similar to September. FB holding the 50 day MA
with a pair of doji. AMZN holding the 10 day EMA in a test. AAPL trying to
hang on at the 20 day EMA. NFLX broke the 50 day Wednesday and sank more
from there. GOOG all the way to tap the 50 day EMA on the Friday low,
modest rebound. Okay, at least it is in great position to bounce.
Software: Took on water Wednesday and Thursday, but some recovered. MSFT
was never in jeopardy. SYNT still working well. VMW announced earnings and
jumped off the 50 day MA. BLKB took a trip to the 50 day MA on the Friday
low; will see if it can make something of the fast test. FFIV paused Friday
but gave us the target Thursday. CRM fell Wednesday, but it might pull off
a hold and new setup.
MARKET STATS
DJ30
Stats: -40.76 points (-0.17%) to close at 24231.59
Nasdaq
Stats: -26.39 points (-0.38%) to close at 6847.59
Volume: 2.29B (-6.53%)
Up Volume: 965.05M (-514.95M)
Down Volume: 1.29B (+360.44M)
A/D and Hi/Lo: Decliners led 1.54 to 1
Previous Session: Advancers led 1.13 to 1
New Highs: 103 (-179)
New Lows: 43 (+9)
S&P
Stats: -5.36 points (-0.20%) to close at 2642.22
NYSE Volume: 1B (-33.33%)
A/D and Hi/Lo: Advancers led 1.06 to 1
Previous Session: Advancers led 1.38 to 1
New Highs: 151 (-147)
New Lows: 31 (-6)
SENTIMENT INDICATORS
VIX: 11.43; +0.15
VXN: 16.57; +0.64
VXO: 10.86; +0.50
Put/Call Ratio (CBOE): 0.78; -0.07
Bulls and Bears: Bulls dipped two weeks back then recovered this past week
though still off the recent peaks. It will be interesting to see how the
DJ30 versus NASDAQ/SOX will play out this past week. Bears dipped but still
hold a more elevated level, though still way off the highs. Still very high
bullish reading.
Bulls: 62.3 versus 61.5
Bears: 15.1 versus 15.4
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 62.3 versus 61.5
61.5 versus 63.5 versus 64.4 versus 63.5 versus 62.3 versus 60.6 versus 60.4
versus 57.5 versus 54.3 versus 50.5 versus 47.1 versus 49.5 versus 49.5
versus 48.1 versus 50.5 versus 57.5 versus 60.0 versus 60.2 versus 57.8
versus 50.0 versus 52.5 versus 54.9 versus 51.5 versus 50.00 versus 55.8
versus 50.00 versus 51.9 versus 58.1 versus 58.7 versus 58.5 versus 54.7
versus 51.9 versus 56.3 versus 55.8 versus 49.5 versus 56.7 versus 53.4
versus 57.7 versus 63.1 versus 61.2 versus 61.8 versus 62.7 versus 61.8
versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8 versus 59.8
versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0 versus 42.9
versus 41.7 versus 47.1 versus 42.9
Bears: 15.1 versus 15.4
15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1 versus 15.2 versus 15.1
versus 17.0 versus 17.1 versus 19.0 versus 20.2 versus 19.1 versus 19.1
versus 18.3 versus 18.1 versus 17.0 versus 16.2 versus 16.5 versus 16.7
versus 18.6 versus 18.8 versus 18.6 versus 18.3 versus 19.2 versus 18.3
versus 17.1 versus 17.3 versus 17.9 versus 17.9 versus 18.3 versus 17.5
versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus 16.5
versus 17.5 versus 17.6 versus 16.7 versus 17.6 versus 17.5 versus 17.3
versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2 versus 19.6
versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3 versus 23.1
versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.363% versus 2.412%. Given the Friday uncertainty, bonds surged as
a safe haven play. Still below the late November highs, but a big bounce
off the 50 day EMA.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.363
versus 2.412% versus 2.385% versus 2.326% versus 2.329% versus 2.321% versus
2.34% versus 2.354% versus 2.367% versus 2.345% versus 2.37% versus 2.336%
versus 2.375% versus 2.407% versus 2.402% versus 2.34% versus 2.326% versus
2.316% versus 2.32% versus 2.332% versus 2.349% versus 2.358% versus 2.378%
versus 2.37% versus 2.419% versus 2.456% versus 2.435% versus 2.421% versus
2.366% versus 2.383% versus 2.318% versus 2.341% versus 2.30% versus 2.302%
versus 2.275% versus 2.321% versus 2.345% versus 2.345% versus 2.361% versus
2.348% versus 2.327% versus 2.326% versus 2.341% versus 2.339% versus 2.312%
versus 2.307% versus 2.236% versus 2.222% versus 2.253% versus 2.276% versus
2.273% versus 2.246% versus 2.234% versus 2.201% versus 2.186% versus 2.19%
versus 2.167% versus 2.134% versus 2.042%
EUR/USD: 1.18983 versus 1.18976. Working laterally over the 10 day EMA,
testing the mid-November break higher off the 50 day EMA.
Historical: 1.18976 versus 1.18529 versus 1.18489 versus 1.1899 versus
1.19329 versus 1.18148 versus 1.17402 versus 1.1791 versus 1.1787 versus
1.1786 versus 1.1799 versus 1.16443 versus 1.16646 versus 1.16439 versus
1.15871 versus 1.15954 versus 1.1609 versus 1.16092 versus 1.16575 versus
1.15480 versus 1.1644 versus 1.16091 versus 1.16330 versus 1.18163 versus
1.17570 versus 1.1759 versus 1.17798 versus 1.18476 versus 1.17995 versus
1.1771 versus 1.17932 versus 1.1823 versus 1.1834 versus 1.18662 versus
1.1813 versus 1.17460 versus 1.17352 versus 1.17100 versus 1.1754 versus
1.17676 versus 1.17315 versus 1.1812 versus 1.17817 versus 1.1746 versus
1.17852 versus 1.18540 versus 1.19476 versus 1.19420 versus 1.19420 versus
1.19954 versus 1.19436 versus 1.1918 versus 1.1874 versus 1.19706 versus
1.19551 versus 1.20379 versus 1.2025 versus 1.19258 versus 1.19143 versus
1.18621 versus 1.19131 versus 1.18938 versus 1.19731 versus 1.19678 versus
1.19212 versus 1.18 versus 1.17516 versus 1.1813 versus 1.17595 versus
1.17107 versus 1.17812 versus 1.17445 versus 1.17751 versus 1.18216 versus
1.17652
USD/JPY: 112.190 versus 112.55. Gave back some ground in the turmoil, but
bounced off an intraday 200 day SMA test, holding much of the week's bounce
off that support.
Historical: 112.55 versus 112.102 versus 111.583 versus 111.244 versus
111.523 versus 111.247 versus 112.349 versus 112.615 versus 112.124 versus
112.91 versus 112.879 versus 113.430 versus 113.615 versus 113.526 versus
113.379 versus 113.99 versus 113.723 versus 113.758 versus 114.064 versus
114.010 versus 114.010 versus 113.845 versus 113.640 versus 113.175 versus
113.675 versus 114.071 versus 113.607 versus 113.913 versus 113.31 versus
113.530 versus 112.561 versus 113.031 versus 112.21 versus 112.20 versus
111.852 versus 112.25 versus 112.413 versus 112.41 versus 112.700 versus
112.653 versus 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
110.01 versus 110.62 versus 110.216 versus 109.434 versus 107.847 versus
108.444
Oil: 58.36, +0.96. Solid bounce Friday after a Monday to Thursday pullback
to the 10 day EMA. OPEC and Russia extended the production cuts through
then end of 2018.
Gold: 1282.30, +5.60. Still having a hard time getting off the 200 day
SMA.
MONDAY
Hey, a jobs report is due out this coming week. Back to normal perhaps in
terms of the market and the news flow? What a hectic Friday, but we here
were happy, at least for now, we stayed the course Friday. NASDAQ and FAANG
still have to show if this was a 'September thing' type of move Wednesday,
but they recovered well enough Friday. Regret? Perhaps should have bought
in with a few positions on that Friday morning selloff.
That said, the market is being called too high by most quarters, and the
bulls/bears supports those calls. Thing is, the market can become more and
more extended before it breaks. Last week certainly shows volatility, at
least in some leadership areas, but others surged. Moreover, this market
has shown that certain groups get sold quickly and then recovery quickly.
That is one of the key areas we are watching to start the week, e.g. FAANG
and others in software, chips. Chips suffered a lot of damage, however; may
take them time to come back around and set up.
There is money moving into new areas and some are testing; will see what
they produce in terms of entries. Some leaders were hit as noted, but some
are already very interesting for new positions. Always worth a look.
At the same time there are downside plays, and given the sentiment and some
of the volatility you have to look at some of those plays. This past week
we had some, but the opening moves were extremely quick; always best to play
the test that fails. So, we look at some of those just in case.
Big picture: stocks are extended, but it is a time of year runs are often
made. Some of the big names broke out of bases, rallied and tested -- then
Wednesday to Friday tested them more. IF there is a mindset to rally to
yearend those tests may make them intriguing to those wanting to play a
yearend move. We will see. The indices are all in uptrends, there were 50
day EMA tests by SOX and even RUTX intraday. If the trends are to continue,
you would anticipate bounces off the 50 day with the resumption of the moves
up the 10/20 day EMA to follow. Again, it all depends upon if the bids
remain and want to carry stocks higher to yearend.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6847.59
Resistance:
6914 is the late November all-time high
Support:
6796 is the early November 2017
The 20 day EMA at 6802
The 50 day EMA at 6685
6641 is the October high
6477 is the September intraday high
The 2016 trendline at 6463
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 200 day SMA at 6271
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2642.22
Resistance:
Support:
The 20 day EMA at 2601
2597 is the November 2017 all-time high
The 50 day EMA at 2569
2544 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
The 200 day SMA at 2454
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 24,231.59
Resistance:
Support:
23,602 is the early November 2017 high
The 20 day EMA at 23,642
The 50 day EMA at 23,221
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
The 200 day SMA at 21,759
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
Promising Tax Vote Keeps Losses In Check
01-Dec-17 16:30 ET
Dow -40.76 at 24231.59, Nasdaq -26.39 at 6847.57, S&P -5.36 at 2642.22
https://www.briefing.com/investor/markets/stock-market-update/2017/12/1/promising-tax-vote-keeps-losses-in-check.htm
[BRIEFING.COM] U.S. equities trimmed weekly gains on Friday, but the prospect of tax reform helped keep losses in check.
The Dow Jones Industrial Average and the S&P 500 slipped 0.2% apiece, while the tech-heavy Nasdaq dropped 0.4%. For the week, the Dow and the S&P 500 added 2.9% and 1.5%, respectively, while the Nasdaq finished with a weekly loss of 0.6%.
Investors were cautious about the state of tax reform coming into Friday's session after the Senate parliamentarian ruled against a fiscal trigger within the Senate's tax reform bill. The trigger would have increased taxes in the future if economic growth failed to make up for lost tax revenue and was incorporated to appease deficit concerns among several GOP Senators.
The ruling forced the Senate to delay its vote, which was originally expected to occur late Thursday or early Friday, as the GOP scrambled to make changes to the bill. In the meantime, the market became preoccupied with a different headline.
In the late morning, former National Security Advisor Michael Flynn pleaded guilty to lying to the FBI about his contacts with a Russian ambassador to the United States and agreed to cooperate with Special Counsel Robert Mueller's team, which is investigating Russia's alleged interference in the 2016 presidential election.
However, the focus was more on an ABC report, which claimed that Mr. Flynn is willing to testify against President Donald Trump. This headline reignited fears about a potential impeachment and sent the major U.S. indices sharply lower. At its worst mark of the day, the S&P 500 held a loss of 1.6%.
Stocks began retracing losses pretty quickly, however, as the focus returned to the Senate's tax reform bill, which Senate Majority Leader Mitch McConnell (R-KY) said has enough support to pass. The official vote is expected to occur sometime Friday evening, but the timing remains fluid.
Five of eleven sectors finished Friday in the red, with industrials (-1.2%) and technology (-0.6%) showing particular weakness. On the flip side, the energy sector (+0.8%) was the top performer, underpinned by an increase in the price of crude oil; WTI crude futures climbed 1.7% to $58.36 per barrel.
In the bond market, U.S. Treasuries ended the week on a higher note, sending yields lower across the curve. The yield on the benchmark 10-yr Treasury note dropped six basis points to 2.36%, while the 2-yr yield finished lower by two basis points at 1.77%.
Elsewhere, equity indices in the Asia-Pacific region finished Friday mixed, with Japan's Nikkei (+0.4%) showing relative strength, while European stocks settled broadly lower, evidenced by the Euro Stoxx 50, which lost 1.2%.
Reviewing Friday's economic data, which was limited to the ISM Manufacturing Index for November and the Construction Spending Report for October:
The ISM Index for November declined to 58.2 from an unrevised reading of 58.7 in October, while the Briefing.com consensus expected a reading of 58.3.
While growth decelerated from the prior month, the key takeaway from the report is that manufacturing activity is still running at a brisk pace. To that end, the indexes for new orders and production both increased month-over-month and the 58.2 reading for the PMI is above the 12-month average of 57.1.
The Construction Spending report for October rose 1.4%, while the Briefing.com consensus expected an increase of 0.5%. The prior month's increase was left unrevised at 0.3%.
The key takeaway from the report is that overall construction spending growth remains modest and an inhibitor of stronger real GDP growth.
On Monday, investors will receive just one economic report--October Factory Orders--which will be released at 10:00 ET.
Nasdaq Composite +27.2% YTD
Dow Jones Industrial Average +22.6% YTD
S&P 500 +18.0% YTD
Russell 2000 +13.3% YTD
Week In Review: Bullish Ahead of Senate Tax Vote
U.S. equities advanced this week, fueled by the prospect of a tax overhaul.
The Dow led the charge, moving higher by 2.9%, followed from a distance by the S&P 500 and the Russell 2000, which added 1.5% and 1.2%, respectively. Meanwhile, the tech-heavy Nasdaq declined 0.6% as technology stocks fell to some profit taking following a big year-to-date run.
Investors kept an eye on Washington throughout the week, awaiting the Senate's vote on its version of a tax reform bill. Things appeared to be progressing nicely as the bill made its way through the Senate Budget Committee on Tuesday and Senator John McCain (R-AZ) voiced his support for the measure on Thursday.
However, the effort hit a bump in the road on Thursday evening when the Senate parliamentarian ruled that a revenue trigger within the bill--which would have raised taxes in the future if economic growth failed to make up for lost tax revenue--is not allowed under Senate rules.
The trigger was a key provision for several GOP Senators who are concerned about the tax overhaul's potential impact on the national debt.
Senate Majority Leader Mitch McConnell (R-KY) suggested on Friday afternoon that a compromise to appease the aforementioned debt concerns had been reached, saying that the GOP has enough votes to pass the bill. However, an official vote has yet to take place.
The Senate's promising progress on tax reform largely fueled this week's rally, but equities also received support from Jerome Powell's Fed Chair confirmation hearing, which took place on Tuesday. Mr. Powell's comments were largely in line with the Fed's current policy rhetoric, but he did sound a little more lax in the area of regulation.
There were a few developments that worked against the bulls this week, perhaps the most notable of which was former National Security Advisor Michael Flynn's plea deal with Special Counsel Robert Mueller's team--which is investigating Russia's alleged interference in the 2016 U.S. presidential election.
Mr. Flynn pleaded guilty to lying to the FBI about his contacts with a Russian ambassador to the United States and agreed to cooperate with Mr. Mueller's investigation. An ABC report indicated that Mr. Flynn is willing to answer questions about President Donald Trump, which reignited fears about a potential impeachment.
Also, North Korea launched a ballistic missile on Tuesday that landed in the Sea of Japan--specifically in Japan's exclusive economic zone.
Nine of eleven sectors finished the week in positive territory. The top-performing groups were telecom services (+6.7%), financials (+5.2%), industrials (+2.9%), and energy (+2.7%), while the weakest sectors were information technology (-2.0%) and real estate (-0.5%).
The energy sector rallied after OPEC and non-OPEC nations, including Russia, agreed on Thursday to extend their production cut agreement by another nine months, as expected. Meanwhile, West Texas Intermediate crude futures finished in the red for just the second time in eight weeks, dropping 1.0% to $58.36 per barrel.
Within the industrial sector, transports showed particular strength, pushing the Dow Jones Transportation Average higher by 5.9%.
Following this week's events, the CME FedWatch Tool still places the chances of a December rate hike at 100.0%.
Stocks Hit Record Highs Ahead of Senate Vote
30-Nov-17 16:20 ET
Dow +331.67 at 24272.35, Nasdaq +49.58 at 6873.96, S&P +21.51 at 2647.58
https://www.briefing.com/investor/markets/stock-market-update/2017/11/30/stocks-hit-record-highs-ahead-of-senate-vote.htm
[BRIEFING.COM] U.S. stocks jumped to new record highs on Thursday, fueled by increased optimism regarding the feasibility of a tax overhaul.
The Dow Jones Industrial Average and the S&P 500 both finished at all-time highs, adding 1.4% and 0.8%, respectively, but some afternoon selling left the indices a step below their best marks of the day. Meanwhile, the tech-heavy Nasdaq climbed 0.7%, reclaiming about half of its Wednesday decline.
Small caps underperformed, but still pushed the Russell 2000 (+0.1%) to a fresh record high.
The Senate will likely vote on its version of a tax reform bill either late Thursday night or early Friday morning. The chances of the bill passing seemingly increased after Senator John McCain (R-AZ) came out in favor of the piece of legislation, however, there are still a handful of GOP Senators sitting on the fence and defects from just three would block the bill's passage.
Financials were bullish following Mr. McCain's announcement, but weakened notably in the afternoon. Nonetheless, the S&P 500's financial sector finished with a solid gain of 0.6%, extending its week-to-date advance to 4.9%. In total, 11 of 11 groups finished Thursday in the green, with gains ranging from 0.1% to 1.6%.
Energy was the top-performing sector, adding 1.6%, after OPEC and non-OPEC nations, including Russia, agreed to extend their production cut agreement by another nine months, as expected. The deal, which will now expire at the end of 2018, seeks to reduce output by 1.8 million barrels per day.
Meanwhile, West Texas Intermediate crude futures finished flat at $57.31 per barrel, unable to add anything further to their November rally--which was largely fueled by the expectation that the OPEC/non-OPEC production cut agreement would be extended. WTI crude futures finished November with a monthly gain of 5.4%.
The industrial sector also moved solidly higher on Thursday, climbing 1.5%. Transports paced the industrial advance, evidenced by the Dow Jones Transportation Average, which climbed 2.0% to finish at a new all-time high for the second day in a row. The DJTA has added 6.8% so far this week.
On the corporate front, CVS Health (CVS 76.60, +3.20) jumped 4.4% following a Wall Street Journal report that the pharmacy retailer is close to reaching a long rumored deal to acquire Aetna (AET 180.18, +0.61) for a price somewhere between $200 and $205 per share. AET shares advanced 0.3%.
Kroger (KR 25.86, +1.48) finished with a gain of 6.1%--although it held a gain of more than 10.0% at the opening bell--after the supermarket chain reported better-than-expected earnings for the third quarter and reaffirmed its profit guidance for fiscal year 2018.
In the bond market, U.S. Treasuries moved lower in a curve-steepening trade, pushing the 2yr-10yr spread higher by one basis point. The yield on the benchmark 10-yr Treasury note jumped four basis points to 2.42%, while the 2-yr yield climbed three basis points to 1.79%.
Elsewhere, European equities held gains through much of Thursday's session, but a late bout of selling left the Euro Stoxx 50 lower by 0.4%. The UK's FTSE showed relative weakness for the second day in a row, finishing with a loss of 0.9%. For the week, the FTSE is down 1.1%.
Stock indices in the Asia-Pacific region settled Thursday mostly lower, but Japan's Nikkei managed to advance 0.6%.
Reviewing Thursday's economic data, which included October Personal Income, October Personal Spending, October PCE Prices, weekly Initial Claims, and the Chicago PMI for November:
Personal income climbed 0.4% in October (Briefing.com consensus +0.3%) following an unrevised increase of 0.4% in September. Meanwhile, personal spending rose 0.3% in October (Briefing.com consensus +0.3%), down from a revised increase of 0.9% in September (from 1.0%). The PCE Price Index increased 0.1% in October (Briefing.com consensus +0.1%), while the core PCE Price Index, which excludes food and energy, increased 0.2% (Briefing.com consensus +0.2%). Year-over-year, the core PCE Price Index is up 1.4%.
The key takeaway from the report is that it points to the prospect of improved consumer spending and the persistence of low inflation.
The latest weekly initial jobless claims count totaled 238,000, which is in line with the Briefing.com consensus. Today's tally was below the revised prior week count of 240,000 (from 239,000). As for continuing claims, they increased to 1.957 million from a revised count of 1.915 million (from 1.904 million).
The key takeaway from the report is the low initial claims reading, which underscores a reluctance on the part of employers to let workers go in a tight labor market.
Chicago PMI for November hit 63.9 (Briefing.com consensus 63.0), down from 66.2 in October.
The key takeaway from the report is that three-in-four firms responding to a special question said another hike in the fed funds rate will have no material impact on their business.
On Friday, investors will receive the ISM Manufacturing Index for November (Briefing.com consensus 58.3) and the Construction Spending Report for October (Briefing.com consensus +0.5%); both reports will be released at 10:00 ET. In addition, November auto and truck sales will be released throughout the day.
Nasdaq Composite +27.7% YTD
Dow Jones Industrial Average +22.8% YTD
S&P 500 +18.3% YTD
Russell 2000 +13.8% YTD
Financial Rally Helps Mitigate Technology Sell Off
29-Nov-17 16:25 ET
Dow +103.97 at 23940.68, Nasdaq -87.97 at 6824.38, S&P -0.97 at 2626.07
https://www.briefing.com/investor/markets/stock-market-update/2017/11/29/financial-rally-helps-mitigate-technology-sell-off.htm
[BRIEFING.COM] Stocks had a mixed outing on Wednesday as heavy losses in technology shares roughly balanced gains in financials and most other areas.
The S&P 500 (unch) finished a tick below its flat line, while the Dow Jones Industrial Average (+0.4%) and the Russell 2000 (+0.4%) both advanced to new record highs.
Conversely, the tech-heavy Nasdaq retreated from its record mark, dropping 1.3%, with its five largest components by market cap--Apple (AAPL 169.48, -3.59), Microsoft (MSFT 83.34, -1.54), Amazon (AMZN 1161.27, -32.33), Facebook (FB 175.13, -7.29), and Alphabet (GOOG 1021.66, -25.75)--losing between 1.8% and 4.0%.
Chipmakers also weighed heavily on the Nasdaq, sending the PHLX Semiconductor Index (-4.4%) to a fresh November low.
Wednesday's technology sell off wasn't fueled by a particular catalyst, rather, it was the result of investors dialing back their technology holdings following an impressive year-to-date run. Even with today's decline of 2.6%, the S&P 500's technology sector remains comfortably atop the 2017 sector standings with a year-to-date gain of 35.7%.
For comparison, the S&P 500 has climbed 17.3% year to date and the second-best performing group--health care--is up 20.0%.
Most sectors benefited from increased buying on Wednesday--especially the financials (+1.8%) and telecom services (+2.7%) groups--as investors looked to reallocate their former technology funds. Being second only to technology in terms of weight, the financial sector helped keep the S&P 500's loss in check throughout the session.
Within the financial group, heavyweights like JPMorgan Chase (JPM 103.73, +2.37), Bank of America (BAC 28.28, +0.64), Wells Fargo (WFC 56.68, +1.11), and Citigroup (C 75.04, +1.34) finished with gains between 1.8% and 2.3%.
Meanwhile, industrial shares also outperformed on Wednesday, especially transports--which sent the Dow Jones Transportation Average (+3.3%) to a new all-time high.
In Washington, Fed Chair Janet Yellen gave her semiannual testimony before the Joint Economic Committee, but the event had little to no impact on the equity market. Ms. Yellen released her prepared remarks prior to her appearance, reiterating her view that the lull in inflation is due to transitory factors.
U.S. Treasuries sold off in a curve-steepening trade, widening the 2yr-10yr spread to 62 basis points. The yield on the benchmark 10-yr Treasury note climbed four basis points to 2.38%, while the 2-yr yield jumped one basis point to 1.76%.
Elsewhere, the major European bourses finished Wednesday's session mixed; Germany's DAX (unch) and France's CAC (+0.1%) closed with slim gains, while the UK's FTSE dropped 0.9%. UK equities tumbled amid an increase in the pound relative to the U.S. dollar (1.3411, +0.0066, +0.5%).
Stock indices in the Asia-Pacific region closed little changed, with Japan's Nikkei (+0.5%) showing relative strength.
Reviewing Wednesday's batch of economic data, which included the second estimate of third quarter GDP, October Pending Home Sales, the Fed's Beige Book for November, and the weekly MBA Mortgage Applications Index:
The second estimate of third quarter GDP pointed to an expansion of 3.3% (Briefing.com consensus +3.2%), up from 3.0% in the initial reading. Meanwhile, the Q3 GDP Deflator was revised to +2.1% (Briefing.com consensus +2.2%) from +2.2%.
The key takeaway from the report is that economic output grew at its strongest pace since the first quarter of 2015, driven by a pickup in both consumer and business spending -- and despite the disruptions created by the hurricanes.
Pending Home Sales for October rose 3.5% (Briefing.com consensus +0.6%). Today's reading follows a revised 0.4% decrease in September (from 0.0%).
The Fed's Beige Book for November showed that economic activity continued to increase at a modest to moderate pace across the 12 Federal Reserve Districts. In addition, most Districts reported a modest to moderate increase in employment, wages, and selling prices. The outlook for holiday sales was reported to be generally optimistic.
The weekly MBA Mortgage Applications Index decreased 3.1% to follow last week's 0.1% uptick.
On Thursday, investors will receive October Personal Income (Briefing.com consensus +0.3%), October Personal Spending (Briefing.com consensus +0.3%), October PCE Prices (Briefing.com consensus +0.1%), and weekly Initial Claims (Briefing.com consensus 238K) at 8:30 ET, followed by the Chicago PMI for November (Briefing.com consensus 63.0) at 9:45 ET.
Nasdaq Composite +26.8% YTD
Dow Jones Industrial Average +21.1% YTD
S&P 500 +17.3% YTD
Russell 2000 +13.6% YTD
Financials Power Another Rally to Record Highs
28-Nov-17 16:25 ET
Dow +255.93 at 23836.71, Nasdaq +33.84 at 6912.35, S&P +25.62 at 2627.04
https://www.briefing.com/investor/markets/stock-market-update/2017/11/28/financials-power-another-rally-to-record-highs.htm
[BRIEFING.COM] Equities ran to new record highs on Tuesday, with the S&P 500's financial sector (+2.6%) leading the advance.
The Dow Jones Industrial Average and the S&P 500 Index climbed 1.1% and 1.0%, respectively, while the tech-heavy Nasdaq Composite advanced a relatively modest 0.5%. All three major U.S. stock indices closed at new all-time highs, as did the small-cap Russell 2000, which jumped 1.5%.
Tuesday's rally was fueled by developments in Washington, including the Senate Budget Committee's approval of the GOP's tax reform bill--which effectively sends the bill to the full upper chamber for a vote. There were concerns that the bill wouldn't make it to the Senate floor due to Republicans' slim one-vote majority in the Budget Committee.
In addition, Jerome Powell's Fed Chair confirmation hearing provided support to the broader market--and to financials in particular.
Mr. Powell's comments were largely in line with the Fed's current policy rhetoric, although he did sound a little more lax than current Fed Chair Janet Yellen in the area of regulation. Specifically, Mr. Powell said rules implemented since the financial crisis are 'tough enough' and emphasized a desire to reduce regulatory constraints on smaller banks.
Financial heavyweights like JPMorgan Chase (JPM 101.36, +3.43), Bank of America (BAC 27.64, +1.05), Wells Fargo (WFC 55.57, +1.62), and Citigroup (C 73.70, +2.31) finished with gains between 3.0% and 4.0%.
On a related note, the yield curve steepened slightly as U.S. Treasuries sold off, pushing the 2yr-10yr spread to 59 basis points. The yield on the benchmark 10-yr Treasury note climbed two basis points to 2.34%, while the 2-yr yield jumped one basis point to 1.75%. A steeper yield curve bodes well for lenders' earnings prospects.
The industrial sector also finished ahead of the broader market, adding 1.5%, as did the lightly-weighted telecom services group, which jumped 2.2%.
However, the top-weighted technology sector struggled throughout the session, ending with a gain of just 0.2%. Mega caps like Apple (AAPL 173.07, -1.02), Alphabet (GOOG 1047.41, -6.80), and Facebook (FB 182.42, -0.61) weighed on the group, finishing with losses between 0.3% and 0.7%.
Sill, the tech space is this year's top-performing sector by far, sporting a year-to-date gain of 39.2%. For comparison, the S&P 500 has climbed 17.3% year to date.
It's also worth pointing out that Tuesday's rally was briefly interrupted in the afternoon following reports that North Korea launched a ballistic missile that landed in the Sea of Japan in Japan's exclusive economic zone. President Trump later responded to the launch, saying "it's a situation we will handle."
Elsewhere, equity markets in Europe finished Tuesday broadly higher, with the UK's FTSE (+1.0%) pacing the advance. After European markets were closed, reports surfaced that the EU and UK have reached a deal on the terms of Brexit liabilities. The pound overcame an early loss to add 0.3% on the U.S. dollar (1.1843).
Stock indices in the Asia-Pacific region ended Tuesday mostly flat; China's Shanghai Composite (+0.3%) showed relative strength.
Reviewing Tuesday's heavy dose of economic data, which included November Consumer Confidence, October Advance International Trade In Goods, October Advance Wholesale Inventories, the September FHFA Housing Price Index, and the September S&P Case-Shiller Home Price Index:
The consumer confidence reading for November increased to 129.5 (Briefing.com consensus 124.0) from the prior month's revised reading of 126.2 (from 125.9).
The key takeaway from the report is that consumers are optimistic about the labor market, but are surprisingly reserved about their short-term income prospects. That is noteworthy because high levels of consumer confidence help consumer spending activity, yet it is income growth that drives consumer spending activity.
The Advance report for International Trade in Goods for October showed a deficit of $68.3 billion (Briefing.com consensus -$65.4 billion), up from a deficit of $64.1 billion in September.
The Advance report for Wholesale Inventories for October showed a decrease of 0.4%. The prior month's increase was revised to 0.1% from 0.3%.
The FHFA Housing Price Index rose 0.3% in September (Briefing.com consensus +0.6%), while the August increase was revised to 0.8% from 0.7%.
The Case-Shiller 20-city Index increased 6.2% in September (Briefing.com consensus +6.0%), while the August increase was revised to 5.8% from 5.9%.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET, the second estimate of third quarter GDP (Briefing.com consensus +3.2%) at 8:30 ET, October Pending Home Sales (Briefing.com consensus +0.6%) at 10:00 ET, and the Fed's Beige Book for November at 14:00 ET.
Nasdaq Composite +28.4% YTD
Dow Jones Industrial Average +20.6% YTD
S&P 500 +17.3% YTD
Russell 2000 +13.2% YTD
Unenthusiastic Start Following Thanksgiving Weekend
27-Nov-17 16:20 ET
Dow +22.79 at 23580.78, Nasdaq -10.64 at 6878.51, S&P -1.00 at 2601.42
https://www.briefing.com/investor/markets/stock-market-update/2017/11/27/unenthusiastic-start-following-thanksgiving-weekend.htm
[BRIEFING.COM] Equities opened the week with a flat, unenthusiastic performance on Monday following the long Thanksgiving weekend.
The S&P 500 Index (unch) and the Nasdaq Composite (-0.2%) finished with modest losses, while the Dow Jones Industrial Average (+0.1%) eked out a slim victory. All three major stock indices kept within a pretty narrow range throughout the session amid lighter-than-usual trading volume.
More than half of the S&P 500's 11 sectors settled Monday's session in positive territory, but gains were limited. The lightly-weighted telecom services and utilities groups were the top performers, adding 0.4% and 0.5%, respectively, followed by the more influential industrial group, which finished higher by just 0.2%.
Conversely, the energy sector was the weakest group, moving lower by 1.0%, as the price of crude oil retreated from its best level in over two years; West Texas Intermediate crude futures finished the session lower by 1.4% at a price of $58.13 per barrel. Monday's loss extends the energy sector's year-to-date decline to 10.8%.
On a related note, OPEC and non-OPEC nations, including Russia, will meet in Vienna on Thursday to discuss extending their supply cut agreement beyond the current end date of March 2018. Most analysts believe that the oil producers will reach an extension agreement, but the length of said extension remains unclear.
Other notable events on this week's calendar include the Fed Chair confirmation hearing for Jerome Powell (Tuesday), current Fed Chair Janet Yellen's semiannual testimony before the Joint Economic Committee (Wednesday), and a vote on the Senate's tax reform bill (expected Thursday).
Corporate news was pretty light on Monday, but it's worth noting that shares of Time (TIME 18.50, +1.60) jumped 9.5% after the magazine company--which, in addition to Time, owns brands like Sports Illustrated, Fortune, and People--agreed to be acquired by Meredith (MDP 67.55, +6.55) for $18.50 per share.
In addition, retailers advanced on 'Cyber Monday' amid continued signs of an upbeat start to the holiday shopping season. L Brands (LB 50.34, +1.98) showed particular strength, adding 4.1%, as did online giant Amazon (AMZN 1195.83, +9.83), which climbed 0.8%--settling at a new record high.
U.S. Treasuries moved mostly higher in yet another curve-flattening trade that cut the 2yr-10yr spread to 58 basis points from 60 bps on Friday. The yield on the benchmark 10-yr Treasury note slipped two basis points to 2.32%, while the 2-yr yield finished unchanged at 1.74%. Yields move inversely to prices.
Elsewhere, the Euro Stoxx 50 dropped 0.5% despite news over the weekend that German Chancellor Angela Merkel's Christian Democratic Union party has agreed to pursue a grand coalition with the Social Democrats in an attempt to break a political deadlock and avoid new elections.
Stocks in the Asia-Pacific region also finished Monday broadly lower, with China's Shanghai Composite (-0.9%) pacing the retreat.
Reviewing Monday's economic data, which was limited to October New Home Sales:
New Home Sales hit an annualized rate of 685,000 in October, while the Briefing.com consensus expected a reading of 629,000. The September figure was revised to 645,000 from 667,000.
The key takeaway from the report is that there was sales growth in all regions, led by a huge pickup in sales in the Northeast and the Midwest, underscoring the solid demand for new homes.
On Tuesday, investors will receive October Advance International Trade In Goods (Briefing.com consensus -$65.4 billion) at 8:30 ET, October Advance Wholesale Inventories also at 8:30 ET, the September FHFA Housing Price Index (Briefing.com consensus +0.6%) at 9:00 ET, the September S&P Case-Shiller Home Price Index (Briefing.com consensus +6.0%) also at 9:00 ET, and November Consumer Confidence (Briefing.com consensus 124.0) at 10:00 ET.
Nasdaq Composite +27.8% YTD
Dow Jones Industrial Average +19.3% YTD
S&P 500 +16.2% YTD
Russell 2000 +11.5% YTD
A Green Friday
24-Nov-17 13:30 ET
Dow +31.81 at 23557.99, Nasdaq +21.80 at 6889.15, S&P +5.34 at 2602.42
https://www.briefing.com/investor/markets/stock-market-update/2017/11/24/a-green-friday.htm
[BRIEFING.COM] The stock market meandered its way through an abbreviated session on Friday and scored modest gains to close out the week. The bulk of today's gains were registered shortly after the opening bell. After that, there was mostly sideways trading action.
Despite the modest gains, they were still good enough to propel the S&P 500 and Nasdaq Composite to new record highs.
Leadership throughout today's thinly-traded session was provided by the information technology sector (+0.5%), which was helped along by reports suggesting Broadcom (AVGO 282.38, +7.01, +2.6%) might return next week with an increased offer to acquire Qualcomm (QCOM 68.91, +0.78, +1.1%).
That news contributed to the outperformance of the semiconductor stocks, which was reflected in the 1.0% gain for the Philadelphia Semiconductor Index. Their leadership, and gains in the likes of Facebook (FB 182.78, +1.91, +1.1%) and Amazon.com (AMZN 1186.00, +29.84, +2.6%), served as the driving influences behind the Nasdaq's record run.
Amazon.com was a focal point throughout the day as it is thought by many to be in the best position to capitalize on Black Friday sales and holiday selling activity in general.
Early reports have made it sound like the online sales activity at least is off to a good start. Adobe Analytics reported that $1.52 billion was spent online by 5:00 p.m. ET on Thanksgiving Day, up 16.8% from last year, and that online sales as of 10:00 a.m. ET on Friday were up 18.4% year-over-year.
Amazon.com's stock strength, however, wasn't exclusive. Well-known retailers such as Macy's (M 21.07, +0.44, +2.1%), Best Buy (BBY 57.00, +0.51, +0.9%), Gap (GPS 29.64, +0.47, +1.6%), and Kohl's (KSS 45.09, +0.46, +1.0%) also exhibited relative strength. Their gains supported a 0.2% advance for the S&P 500 consumer discretionary sector.
Gains in the materials (+0.5%), real estate (+0.4%), and energy (+0.3%) sectors also helped prop up the broader market.
Elsewhere, oil prices jumped 1.5% to $58.87 per barrel. That move was aided by a weaker dollar, geopolitical angst, short-term supply disruptions tied to a Keystone pipeline outage, and speculation that OPEC and Russia are primed next week to agree to an extension of their oil production cut program.
The latter meeting will take place on Thursday and will be a key event in a week that will feature several key events, including Jerome Powell's Fed Chair confirmation hearing (Tuesday), current Fed Chair Janet Yellen's economic outlook testimony before the Joint Economic Committee (Wednesday), and an expected vote on the Senate's tax bill on Thursday.
In terms of this week, it was another winning week. The Russell 2000 led the way with a 1.8% gain, followed by the Nasdaq Composite, up 1.6%, the S&P Mid Cap 400, up 1.0%, the S&P 500, up 0.9%, and the Dow Jones Industrial Average, up 0.8%.
Year-to-date returns are as follow:
Nasdaq Composite +28.0%
Dow Jones Industrial Average +19.1%
S&P 500 +16.2%
S&P Mid Cap 400 +12.0%
Russell 2000 +11.9%