Opening Comment — December 18, 2018
DJIA: 23,592.98
S&P 500: 2,545.94
Nasdaq Composite: 6,753.73
Stock index futures are indicating a higher open Tuesday. The Dow and S&P 500 are both adding 0.7% in pre-market action. The Nasdaq 100 is trading 0.8% above fair value on the GLOBEX.
The major averages are poised to advance following another sharp sell-off on Monday. Yesterday’s moves left the U.S. benchmarks at their lowest level in fourteen months, and on pace for their worst December performance since the Great Depression. In central banks news, the Federal Reserve kicks off its final policy meeting of 2018. On the data front, housing starts increased 3.2% in November, well above the downwardly revised 1.6% decline in October. Separately, November building permits jumped 5.0%, beating expectations of a 0.4% drop.
In corporate news, Oracle is jumping 5.4% to $48.21 in pre-market trading after topping Wall Street revenue and profit forecasts in its latest quarterly report. Johnson and Johnson is rebounding 1.1% to $130.50, while Boeing is up 2.7% $324.50 after both companies announced an increase to their respective share repurchase programs.
European bourses are mixed near mid-session. The Euro STOXX 600 is off 0.2% while Germany’s DAX is gaining 0.3%. In Asia overnight, the Shanghai Composite declined 0.8% the Japanese Nikkei 225 lost 1.8% as recent strength in the yen weighed on exporters.
Treasuries are strengthening along the curve with the yield on the 10-year off three basis points to 2.83%. In commodities, WTI crude is losing 2.3% to $48.76/barrel, near its lowest level since September 2017. COMEX gold is little changed at $1,247.50/ounce amid a weaker dollar.
Midday Comment — December 18, 2018
DJIA: 23,806.26, up 213.28
S&P 500: 2,559.03, up 13.09
Nasdaq Composite: 6,800.20, up 46.47
Stocks are higher near midsession. The Dow is adding 213 points to 23806 while the S&P 500 is up 13 points to 2559. The Nasdaq Composite is advancing 46 points to 6800.
The major averages are rebounding from sharp losses in the prior session. Even with today’s advance the major averages remain on pace for their worst December performance since the Great Depression. The Federal Reserve is garnering an outsized focus from market participants as policy makers are set to begin their final meeting of 2018. On the data front, housing starts increased 3.2% in November, well above the downwardly revised 1.6% decline in October. Separately, November building permits jumped 5.0%, beating expectations of a 0.4% drop.
Eight of 11 S&P 500 sectors are higher near mid-session as Real Estate shares pace gains. Industrials are also outperforming as Boeing is climbing 4.2% to $329.24 after the jet-maker increased both its dividend and share buybacks. The Technology and Consumer Discretionary groups are rebounding as Apple is adding 1.0% to $165.65 and Amazon is climbing 1.3% to $1538.68. Consumer Staples and Energy stocks are the laggards near mid-day.
Breadth is positive on issues by 4:3 on the NYSE and 8:7 on the Nasdaq. Composite NYSE volume is more than 1.6 billion shares.
Treasuries are strengthening along the curve with the yield on the 10-year off three basis points to 2.83%. In commodities, WTI crude is tumbling 5.3% to $47.25/barrel, the lowest level in 15-months. COMEX gold is adding 0.2% to $1248.20/ounce amid a weaker dollar.
Closing Comment — December 18, 2018
DJIA: 23,675.64, up 82.66
S&P 500: 2,546.16, up 0.22
Nasdaq Composite: 6,783.91, up 30.18
Stocks finished higher Tuesday. The Dow added 82 points to 23,675 while the S&P 500 was up less than a point to 2,546. The Nasdaq Composite advanced 30 points to 6,783.
The major averages rebounded modestly from a 14-month low during another volatile session on Wall Street. The S&P 500 traded in a wide range during the session jumping 1.1% and falling as much as 0.7% before ending essentially unchanged. Despite today’s advance, the U.S. benchmarks remain on track to post their worst December performance since the Great Depression. The Federal Reserve garnered attention as policy makers began the first day of their final meeting of 2018. On the data front, housing starts increased 3.2% in November, well above the downwardly revised 1.6% decline in October. Separately, November building permits jumped 5.0%, beating expectations of a 0.4% drop.
Six of 11 S&P 500 sectors ended in positive territory. Consumer Discretionary led the advance as Amazon climbed 2.0% to $1551.48. Technology shares also outperformed as Apple added 1.3% to $166.07. Energy stocks were a notable decliner in sympathy with 16-month low oil prices. Exxon Mobil lost 2.8% to $72.00 while Chevron declined 2.4% to $109.74.
Breadth was positive on issues by 9:8 on the NYSE and negative by 3:2 on the Nasdaq. Composite NYSE volume was more than 4.2 billion shares.
Treasuries strengthened with the yield on the 10-year note off four basis points to 2.82%. In commodities, WTI crude tumbled 7.3% to $46.24/barrel. COMEX gold added 0.1% to $1,249.20/ounce amid a weaker dollar.