Opening Comment — October 20, 2017
S&P 500: 2,562.10
Nasdaq Composite: 6,605.10
Stock index futures are indicating a higher open Friday. The Dow is up 0.3% in the pre-market. The S&P 500 and Nasdaq 100 are both trading 0.2% above fair value on GLOBEX.
The major averages are poised to advance amid optimism on tax-reform after the Senate passed a budget resolution. Futures are also higher as investors digest more corporate earnings releases. Procter & Gamble is down 1.7% to $90.05 even after posting quarterly results above consensus estimates. General Electric is dropping 7.4% to $21.83 following the company’s reduced profit guidance. Honeywell is up 0.7% to $144.60 as revenue exceeded expectations. Schlumberger is 0.2% higher at $64.60 as earnings matched analyst forecasts.
The Fed will likely garner attention in the session with Chair Janet Yellen speaking on monetary policy after the close. On the data front, a report is expected to show existing home sales declined 0.9% in September to 5.30 million from 5.35 million in August.
European markets are in positive territory at midsession. The FTSE is up 0.2% in London and the DAX is also gaining 0.2% in Frankfurt as European Union officials meet at a summit in Brussels. In Asia overnight, the Nikkei edged less than 0.1% in Tokyo. China’s Shanghai Composite added 0.3% on the session.
Treasuries are called lower sending yields higher in early trading. The benchmark 10-year note yield is climbing five basis points to 2.37%. In commodities, NYMEX WTI crude is down 0.6% to $51.01/barrel. COMEX gold is declining 0.6% to $1279.60/ounce.
Midday Comment — October 20, 2017
DJIA: 23,281.10, up 118.06
S&P 500: 2,571.20, up 9.10
Nasdaq Composite: 6,631.42, up 26.35
Stocks are higher near mid-session on Friday. The Dow is up 118 points to 23281. The S&P 500 is gaining 9 points to 2571. The Nasdaq Composite is adding 26 points to 6631.
The major averages remain on pace for their sixth straight week of gains as investors remain optimistic for tax-reform legislation, by year-end. On Thursday, the Republican controlled Senate approved a budget measure, which allows Republicans to pass reforms without the support of the Democrats. On the data front, a report today showed existing home sales unexpectedly rose 0.7% in September versus consensus projections of a 1.0% decline.
Six of 11 S&P 500 sectors are positive in early trading with Technology a notable outperformer. Shares of PayPal are rising 4.8% to $70.43 after its earnings topping analyst estimates. In other earnings news, General Electric is dropping 1.5% to $23.20 following the company’s reduced profit guidance. The Healthcare sector is generating headlines in todays’ session, with Celgene down 9.5% to $123.13 on negative analyst commentary surrounding the biotech companies’ FDA trials. Intuitive Surgical is rising 4.6% to $373.76 after topping analyst forecasts for its third quarter earnings.
Breadth is positive on issues by 5:3 on the NYSE and 10:6 on the Nasdaq. Composite NYSE volume is 1.3 billion shares.
Treasuries are lower near midsession with the yield on the benchmark 10-year note climbing six basis points to 2.38%. In commodities, NYMEX WTI crude is rising 0.1% to $51.35/barrel. COMEX gold is declining 0.7% to $1288.80/ounce amid a stronger dollar.
Closing Comment — October 20, 2017
DJIA: 23,328.36, up 165.32
S&P 500: 2,575.15, up 13.05
Nasdaq Composite: 6,629.06, up 23.99
Stocks finished at record highs Friday. The Dow added 165 points to 23328. The S&P 500 gained 13 points to 2575. The Nasdaq Composite climbed 23 points to 6629.
The major averages posted gains for the sixth consecutive week as investors remained optimistic that tax reform will occur before year end. On Thursday, the Senate passed a budget measure, which will allow the Republicans to pass reforms without the Democrats support. On the data front, a report today showed existing home sales unexpectedly rose 0.7% in September versus projections of a 1.0% decline.
Nine of 11 S&P 500 sectors were higher Friday. Financials stocks rallied as JP Morgan added 1.4% to $99.51 and Goldman Sachs gained 2.0% to $244.73 on positive analyst commentary. Technology also outperformed as PayPal advanced 5.5% to $70.97 after its earnings topping analyst estimates. In other earnings news, General Electric pared earlier losses and finished up 1.1% to $23.83 after a mixed earnings release. In Healthcare, Celgene dropped 10.8% to $121.33 on negative analyst commentary, while Intuitive Surgical climbed 3.4% to $369.58 after topping analyst forecasts.
Breadth was positive on issues by roughly 2:1 on the NYSE and roughly 3:2 on the Nasdaq. Composite NYSE volume was 3.3 billion shares.
Treasuries were lower as the yield on the benchmark 10-year note climbed six basis points to 2.38%. In commodities, NYMEX WTI crude rose 0.3% to $51.47/barrel. COMEX gold declined 0.7% to $1277.40/ounce amid a stronger dollar.
For the week, the S&P 500 climbed 0.8% while the Dow gained 2.0% and the Nasdaq advanced 0.3%.
Wells Fargo Investment Institute, Inc., is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.