Dow Scales Past 24,000!
It’s hard to know where to start! FAANG stocks recouped losses, OPEC and Russia decided on a crude production cut extension, and the Senate’s tax vote was postponed, after much drama and fanfare. But what was most sensational was the meteoric climb of the Dow past 24,000 for the first time ever and conversely, Bitcoin’s bitter fall. The Dow, buoyed by its longest streak of monthly gains in 22 years, made history, investors growing more optimistic about the possibility of a U.S. tax overhaul. It wasn’t just the Dow, though; all major indexes rose on the day, likewise ending higher on the month.
The blue chip Dow skyrocketed 1.39%, ending at 24,272.35. The S&P 500 was up 0.8%, the tech heavy NASDAQ tacking on 0.73%. The small-cap Russel 2000 ended up 0.12%, though shed a lot of its gains from earlier in the trading day. All of the S&P 500 sectors ended up, the energy sector, though, crowned the biggest winner. The S&P 500, like the Dow, has now traded up for eight consecutive months. Some of the factors propelling the gains this year have included solid corporate profits, low interest rates – which add to the stock market’s attractiveness – and hopes that the White House and Congress will deliver business friendly tax cuts.
On the macro front, jobless claims came out beneath analysts’ forecasts last week, while consumer spending edged up 0.3% in October, beating the 0.2% forecast.
As mentioned yesterday, enabling corporations to repatriate earnings from abroad at lower cost, i.e. part of Trump’s tax package, would be a boon for stockholders, but over and beyond that, lowering tax rates on domestic earnings could have even a larger long-term effect.
BNY Mellon Investment Management investment strategist, Alicia Levine, honed in the effect that could have: “There are still a lot of details we don’t know, but if the corporate tax rate is moved down near 20%, you’d be adding $10 per share to S&P 500 earnings. If you do that, valuations are not out of whack with what growth rates will be.”
In terms of individual stocks, as noted above, the FAANG stocks bounced back! Facebook (FB) rose 1.2%, Amazon (AMZN) back to form with gains of 1.33%. Apple traded up 1.4%. Netflix (NFLX) was off 0.30%, Google (GOOG) barely budging. Juniper (JNPR) was off 5.9% on the day, after Nokia squelched rumors that it was interested in buying the company. Barnes and Noble (BKS) plunged 12%, the company reporting a larger than expected Q2 loss. Kroger (KR) rose 6.1%, L Brands rallying 6.7%.
Bitcoin (BTCUSD), which we’ve highlighted recently, plunged 6.7%, after having traded at over $10,000 in Asia. With bitcoin, the digital currency that’s received so much fanfare of late, it’s hard to know what the precise catalysts are behind its jagged movements. Soaring one day, whipsawed the next, fears of a bubble ever-rampant, and so many critics calling it just another Ponzi scheme, it’s really a matter of caveat emptor: “BUYER BEWARE.” This market doesn’t trade like other markets. A partial outage on Coinbase caused one coin to drop $2,000 from above $11,000. By late afternoon, a recovery brought the currency back up to just under $10,000. Trading bitcoins is tantamount to entering the lion’s den. Fortunes can be made and squandered in seconds.
Lastly, the dollar fell on news that the Senate tax vote would be postponed.
Today’s Economic Calendar: At 9:45, the PMI Manufacturing Index will be released, the ISM Mfg Index coming out at 10:00. Construction spending numbers will be released at 10:00. Pay special note to the Baker-Hughes Rig Count after the active movement we saw yesterday in energy stocks.
Friday’s Hot Stocks: ZUMZ, ULTA, AMBA, MYL, FIVE
Have a great trading day!
|Monday||10:00||New Home Sales||620 K||Medium|
|Tuesday||9:00||FHFA House Price Index||0.6 %||Medium|
|Tuesday||9:00||S&P Case-Shiller||0.4 %||Medium|
|Tuesday||10:00||Consumer Confidence||240 K||High|
|Tuesday||10:00||Jerome Powell Speaks||–||High|
|Wednesday||10:00||Janet Yellen Speaks||–||High|
|Wednesday||10:00||Pending Home Sales Index||1.0 %||Medium|
|Thursday||8:30||Jobless Claims||240 K||Medium|
|Thursday||8:30||Personal Income and Outlays||0.3 %||Medium|
|Friday||9:45||PMI Manufacturing Index||54.5||Medium|
|Friday||10:00||ISM Mfg Index||58.4||High|
|Friday||10:00||Construction Spending||0.5 %||Medium|
|TECD||Tech Data Corporation||PM||Monday|
|MRVL||Marvell Technology Group Ltd.||PM||Tuesday|
|PSTG||Pure Storage, Inc.||PM||Tuesday|
|NUAN||Nuance Communications, Inc.||PM||Tuesday|
|TIF||Tiffany & Co.||AM||Wednesday|
|RY||Royal Bank of Canada||AM||Wednesday|
|GWRE||Guidewire Software, Inc.||PM||Wednesday|
|JACK||Jack in the Box Inc.||PM||Wednesday|
|GLNG||Golar LNG Limited||AM||Thursday|
|DCI||Donaldson Company, Inc.||AM||Thursday|
|KR||The Kroger Co.||AM||Thursday|
|ULTA||Ulta Beauty, Inc.||PM||Thursday|
|FIVE||Five Below, Inc.||PM||Thursday|
|BIG||Big Lots, Inc.||AM||Friday|
New York Strategy Swing