Opening Comment — January 16, 2019
S&P 500: 2,610.30
Nasdaq Composite: 7,023.83
Stock index futures are indicating a higher open Wednesday. The Dow is up 0.3% while the S&P 500 is gaining 0.2% in pre-market trading. The Nasdaq 100 is trading 0.1% above fair value on GLOBEX.
The major averages are poised to advance as fourth quarter earnings reports continue to flow in. The early gains follow yesterday’s upbeat session, where the S&P 500 rose more than 1% to close above 2,600 for the first time since December. On the data front, a report this morning showed that mortgage applications spiked 13.5% in the most recent week. A separate release showed import prices dropped 1.0% in December. Today’s expected updates on retail sales and business inventories will be delayed due to the partial government shutdown. The Federal Reserve will release its Beige Book report at 2 p.m. ET.
In corporate news, Bank of America shares are up 4.6% to $27.78 after topping analyst expectations on both the top and bottom line. Goldman Sachs is climbing 2.2% to $183.94 as an increase in investment banking revenue helped offset a slump in bond trading.
European markets are mixed at mid-session. The Euro STOXX 600 gaining 0.3%. U.K.’s FTSE 100 is down 0.6% as Prime Minister May faces a no-confidence vote today after her proposed Brexit deal was defeated in Parliament yesterday. In Asia overnight, the Nikkei 225 dipped 0.6%.
Treasuries are weakening with the yield of the 10-year note down one up two basis points to 2.73%. In commodities, WTI crude is down 1.0% to $51.58/barrel. COMEX gold is up 0.2% to $1290.40/ounce.
Midday Comment — January 16, 2019
DJIA: 24,192.00, up 126.41
S&P 500: 2,617.08, up 6.78
Nasdaq Composite: 7,038.84, up 15.00
Stocks are higher near mid-session Wednesday. The Dow is adding 126 points to 24,192while the S&P 500 is climbing 6 points to 2,617. The Nasdaq Composite is gaining 15 points to 7,038.
The major averages are advancing as investors digest a flurry of corporate earnings reports. On the data front, a report showed mortgage applications spiked 13.5% in the most recent week. An additional update showed home builder sentiment rebounded in January after posting sharp losses in the prior two months. A separate release revealed import prices dipped 1.0% in December, leading to the largest year-over-year decline since 2016 of 0.6%. In central bank news, The Federal Reserve will release its Beige Book report at 2 p.m. ET.
Six of 11 S&P 500 sectors are higher near mid-session with Financials pacing gains. Shares of Bank of America are climbing 7.6% to $28.57 while Goldman Sachs is jumping 8.4% to $195.02 following positive analyst takeaways from both institutions fourth quarter reports. In other earnings news, shares of Ford are losing 4.2% to $8.47after the automaker pre-announced earnings that fell short of analyst expectations. Meanwhile, shares of Nordstrom are declining 6.5% to $44.21 after the retailer revealed disappointing holiday sales figures.
Breadth is positive on issues by roughly 9:5 on both the NYSE and the Nasdaq. Composite NYSE Volume is more than 1.5 billion shares.
Treasuries are weakening with the yield of the 10-year note up two basis points to 2.73%. In commodities, WTI crude is down 0.2% to $52.02/barrel. COMEX gold is up 0.4% to $1,294.00/ounce.
Closing Comment — January 15, 2019
DJIA: 24,065.59, up 155.75
S&P 500: 2,610.30, up 27.69
Nasdaq Composite: 7,023.84, up 117.92
Stocks finished higher Tuesday. The Dow added 155 points to 24,065 while the S&P 500 climbed 27 points to 2,610. The Nasdaq Composite gained 117 points to 7,023.
The major averages snapped a two-day losing streak amid broad strength in the Tech and Healthcare sectors. News that China’s central bank will boost efforts to foster economic growth also lifted investor sentiment. On the data front, an update on inflation revealed the Producer Price Index (PPI) decreased 0.2% in December. Core PPI, which excludes food and energy, showed wholesale prices rose 2.7% from the same period last year. In a separate release, manufacturing in the New York Fed region expanded at the slowest pace since 2017 in January.
Nine of 11 S&P 500 sectors finished higher. The Communication Services group paced gains with Netflix rising 6.5% to $354.64 after the streaming giant announced its largest ever monthly service charge increase. Health Care also outperformed with shares of UnitedHealth adding 3.5% to $256.84 after topping profit and revenue expectations. Technology stocks were also broadly higher with Microsoft adding 2.9%. to $105.01. In other earnings news, JPMorgan gained 0.7% to $101.68 despite missing profit expectations for the first time in 15 quarters.
Breadth was positive on issues by roughly 2:1 on both the NYSE and the Nasdaq. Composite NYSE volume was more than 3.5 billion shares.
Treasuries were mixed with the yield of the benchmark 10-year note advancing one basis point to 2.71%. In commodities, WTI crude added 3.2% to $52.11/barrel. COMEX gold was down 0.2% to $1,288.90/ounce amid a stronger dollar.