New All-Time High: Will Amazon Break Past $1,000?!
The S&P 500 and the NASDAQ scaled to new highs yesterday, the market propped up by momentum in consumer cyclical stocks after solid reports from Best Buy (BBY) and other retail chains. The consumer cyclical sector (XLY) rose 0.9%, the retail sector (XRT) soaring 1.6% in its best day since December 7th.
The stock of Best Buy (BBY) soared 21.5% to a new historic high, making it the strongest performing stock on the S&P 500, after the chain’s Q1 sales caught the market off guard. Right after BBY, came another S&P 500 retailer, PVH, which holds well-known brands like Tommy Hilfiger. The stock jumped 4.8% to a 6-month high against the backdrop of its strong results. The stock of Sears (SHLD) soared 13.5% after reporting its first quarterly profit in almost two years.
Earnings results from yesterday’s reporting retailers helped slightly offset the effect of the earnings reports released prior by other retailers, which continue to be blindsided by the meteoric rise of Amazon (AMZN) which recently broke up past the $900 level. Yesterday’s robust reports gave the S&P 500 their 6th straight day of gains, making last Wednesday’s sell-off a bygone memory.
Amazon is now trading up 32.5% on the year, its stock trading up 1.3% on Thursday at $993.38, investors continuing to inject new funds into large tech stocks which have outperformed the market year-to-date. Amazon managed to climb to $999 during trading, before relinquishing a little bit of its gains. Wall Street analysts have given the company a 12-month target price of $1,095.
Other tech stocks also participated in Thursday’s rally – and have seen sizable gains year-to-date. Apple (AAPL) is trading up 33% year-to-date. Netflix (NFLX) is next in line with gains of 31.7%, Google (GOOGL) itself trading up 25.2% on the year.
The VIX index, the best gauge for the short-term volatility foreseen in the market, fell to a 2-week low, trading over the course of the trading day at the 9.72 point level. As of now, no imminent and clear risk factor has crystallized. The lack of fear and complacency support the market.
In Summary for the Day: The Dow Jones rose 0.34%, the S&P 500 jumping 0.44% and the NASDAQ rallying 0.69%. Gold rose 0.3%, crude tumbling 4.8% and closing beneath the $50 level.
When considering the high price valuations, further market gains are likely to be limited unless we see far-reaching tax reform on Capitol Hill.
Energy stocks (ETF: XLE) limited the gains of the S&P 500, after the sector fell 1.8% on the heels of a plunge of almost 5% in crude prices. In brief, the cartel agreed to extend the production cuts, but not to the degree expected by investors.
Also on the negative side, General Motors (GM) tumbled 1.8% to the $32.60 level after a class action suit was filed claiming that the company rigged the diesel engines of hundreds of thousands of automobiles using a special device similar to that used by Volkswagen in order to ensure the company passed emissions test.
The market’s gains continued after closing on the heels of new earnings report – a rise of 2% in the stock of Costco (COST), and a surge of 13.3% in the stock of DECK.
On the S&P 500, 92 stocks rose to new 52-week highs, 12 dipping to new yearly lows; on the NASDAQ, 141 stocks recorded new 52-week highs, 66 falling to new yearly lows.
About 6.4 billion shares changed hands on U.S. exchanges, beneath the 6.8 billion average over the last 20 trading days.
Friday: When considering that the NASDAQ index is now at an all-time high, Amazon (AMZN) may even give it another push; the stock could possibly break past the $1,000 milestone for the first time ever in today’s trading, joining a small cadre of stocks.
Trading today is expected to be relatively quiet leading up to the long weekend. On Monday, trading will be closed in the U.S. for Memorial Day.
The economic figures that will be at center-stage today will be durable goods orders and the first GDP reading, both coming out at 8:30 N.Y. time. The Supply Managers’ PMI index for the service sector, along with Consumer Confidence numbers, will be released at 10:00.
April’s durable goods numbers are expected to record a drop of 1.8%, after having risen 0.9% in March. Today’s big headline, though, will be the Q1 Gross Domestic Product (GDP) reading, which is expected to point to growth of 0.8% in the U.S. economy. The Consumer Confidence Index is expected to lose a little ground, the projection being a drop from the 97.7 point level to the 97.5 point level.
Friday’s Hot Stocks: COST, DECK, ULTA, GME, NTNX, SPLK, BIG
Have a great trading day!
|Tuesday||10:00||New Home Sales||–||Medium|
|Wednesday||9:00||FHFA Housing Price Index||–||Medium|
|Wednesday||10:00||Existing Home Sales||–||Medium|
|Wednesday||10:30||Crude Oil Inventories||–||Low|
|Friday||8:30||GDP – Second Estimate||–||Medium|
|Friday||10:00||Michigan Sentiment – Final||High|
|A||Agilent Technologies, Inc.||PM||Monday|
|TTWO||Take-Two Interactive Software, Inc.||AM||Tuesday|
|TOL||Toll Brothers, Inc.||AM||Tuesday|
|TIF||Tiffany & Co.||AM||Wednesday|
|AAP||Advance Auto Parts, Inc.||AM||Wednesday|
|DY||Dycom Industries, Inc.||AM||Wednesday|
|EV||Eaton Vance Corp.||AM||Wednesday|
|LOW||Lowe’s Companies, Inc.||AM||Wednesday|
|SIG||Signet Jewelers Limited||AM||Thursday|
|DLTR||Dollar Tree, Inc.||AM||Thursday|
|BBY||Best Buy Co., Inc.||AM||Thursday|
|MRVL||Marvell Technology Group Ltd.||PM||Thursday|
|ULTA||Ulta Beauty, Inc.||PM||Thursday|
|COST||Costco Wholesale Corporation||PM||Thursday|
|BRCD||Brocade Communications Systems, Inc.||PM||Thursday|
|VEEV||Veeva Systems Inc.||PM||Thursday|
|BIG||Big Lots, Inc.||AM||Friday|
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