After The Close - The equity markets pressed ahead earlier this morning, but gradually retreated as the day unfolded, before firming again at the end. Of note, Wall Street continues to look for signs that a trade deal between the U.S. and China will materialize in the near future. However, it is still unclear if, and when, such a development might take place. No doubt, the shifting situation, and remarks from the Administration, have added some choppiness to the market lately. At the end of trading today, the Dow Jones Industrial Average was unchanged; the broader S&P 500 Index was ahead five points; and the NASDAQ was higher by 22 points. Market breadth showed a divided session, with advancers about even with decliners on the NYSE. The healthcare, industrials, and technology names made positive strides, while the financials and the basic materials issues took a step back.
Meanwhile, it was a light day for economic news, and that might partially explain the lack of clear direction in the market today. Tomorrow, the pace should pick up a bit. Specifically, the Consumer Price Index (CPI) for the month of October is due to be released. In addition, the EIA will put out its latest weekly crude oil inventory figures. On Thursday, the Producer Price Index (PPI) will follow, along with the latest jobless claims information.
In the corporate arena, the third-quarter earnings season is now in its final stages. However, some widely held names are still weighing in with their numbers. Shares of Rockwell Automation (ROK) moved higher today, after that company posted good results and provided an upbeat outlook. Elsewhere, shares of Tyson Foods (TSN) jumped in price, even though the company put out a mixed report.
Technically, the stock market has been performing quite well lately. The broader S&P 500 Index is sitting above the 3,000 mark, and is near record high ground. The third-quarter earnings season was probably a bit better than many investors had expected. Furthermore, it seems that trade tensions are starting to ease, at the very least. - Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell - Trade concerns with China, which had lessened notably last week, helping the stock market to rise nicely and set a series of all-time records in the process, reappeared yesterday morning. These renewed worries would then push the stock market lower at the outset of the week's opening session on Veteran's Day. At its morning lows, the Dow Jones Industrial Average was off by a little more than 160 points. But that descent was just after the open, and the market began a comeback just after trading began.
In fact, the diminution in these losses would commence very shortly, and while the equity market was still lower for the duration of the morning, the deficits grew progressively smaller, so that by just after the noon hour, the blue chip composite had inched into the black. It then would stay there for much of the duration of the session, in spite of the nervousness surrounding trade. In fact, had it not been for some late selling, which pushed the Dow nominally into the red briefly, that index remained narrowly positive, finally ending up 10 points.
Things went a little less smoothly for the S&P 500 Index and the NASDAQ, both of which would finish slightly in the red under pressure from some lingering doubts about the trade situation, as the President signaled late last week that he was not yet ready to remove the recently imposed tariffs on goods coming in from China.
As to the Dow's outperformance yesterday, it was principally attributable to a strong gain in shares of Boeing (BA –Free Boeing Stock Report) That issue rose by nearly 5% on the session on word that it could resume delivery of the 737 MAX airline in December. Meanwhile, the Dow also was propped up by an outsized gain in the shares of blue chip component Walgreens Boots Alliance (WBA – Free Walgreens Stock Report). That issue following a report that the company has been approached about possibly going private. In response, that stock rose almost 5%, having been up more than that earlier in the session.
Another depressant on the day was the eroding situation in Hong Kong, where a police officer wounded a protestor as demonstrators blocked subway lines and roads in the financial center.
All of this happened on a semi-holiday that featured no economic news on note. Looking ahead, the rest of the week will feature some words from Federal Reserve Chair Jerome Powell and then on Friday, the Commerce Department will release the latest data on retail sales. The October report is expected to show a firming in demand following a disappointing drop in demand the prior month. We also are due for data on industrial production later in the week. In sum, it will be a fairly busy stretch for data, but the focus will likely be on the latest in trade.
Looking to the day ahead, we see that shares were higher in Asia in the overnight hours, despite increasing trade jitters, while in Europe this morning, the leading bourses are gaining ground. Elsewhere, Treasury note yields, up slightly yesterday, are essentially flat in early trading, while our equity futures are positioned to begin the new day with small gains as investors await a speech on trade by the President. - Harvey S. Katz, CFA