Closing Comment — July 19, 2019
DJIA: 27,154.20, down 68.77
S&P 500: 2,976.61, down 18.50
Nasdaq Composite: 8,146.49, down 60.75
Stocks Post Weekly Loss on Mixed Earnings
Stocks finished lower Friday with the S&P 500 and Nasdaq capping their worst weekly performance since May. Investors digested mixed corporate earnings results, while geopolitical tensions in the Middle East pressured the major averages. The Dow slipped 68 points, posting a 0.7% loss for the week. The S&P 500 shed 0.6%, bringing its weekly decline to 1.2%. The Nasdaq Composite dipped 0.7%, down 1.2% on the week.
In earnings, Microsoft edged higher after topping analyst profit estimates and revealing 39% year-over-year revenue growth in its cloud business. Kansas City Southern advanced 4.6% after the rail operator delivered an earnings beat. In other corporate news, Boeing climbed 4.5% despite the jet maker announcing a $4.9 billion write-off due to the ongoing 737 MAX aircraft issues. Anheuser-Busch InBev added 5.5% after announcing the sale of its Australian business unit for $11.3 billion.
Central bank rhetoric has also garnered attention this week, with New York Fed President John Williams stated that Fed officials needed to “act quickly” when an economic slowdown is observed in conjunction with lower interest rates. Williams later clarified his remarks by stating the speech was based on academic research and not meant to provide any specific policy guidance.
Treasuries posted a weekly gain, with the yield on the 10-year note down six basis points to 2.05%. On the data front Friday, the University of Michigan’s preliminary release revealed consumer sentiment edging higher in July. In commodities, WTI crude gained 0.6% to $55.63/barrel, still notching its worst week since May on inventory builds and demand concerns.
Midday Comment — July 19, 2019
DJIA: 27,285.00, up 62.52
S&P 500: 2,992.99, down 2.12
Nasdaq Composite: 8,201.92, down 5.32
Stocks Mixed; Microsoft Hits Record High
The major averages are mixed near mid-session Friday as investors digest corporate earnings and remain optimistic that the Federal Reserve will lower interest rates. The Dow is adding 62 points, while the S&P 500 and Nasdaq Composite are both off by less than 0.1%.
In earnings news, Microsoft is advancing 1.3%, testing record highs, after topping analyst earnings estimates and revealing 39% year-over-year revenue growth in its cloud business. In M&A news, Anheuser-Busch InBev is adding 5.2% after announcing the sale of its Australian business unit for $11.3 billion. Elsewhere, PepsiCo. is looking to acquire South Africa’s Pioneer Foods for $1.7 billion. Shares of Boeing are climbing 3.7% despite the jet maker announcing a $4.9 billion write off due to the ongoing 737 max issues. Breadth is even on both the NYSE and the Nasdaq. Composite NYSE volume is more than 1.1 billion shares.
Yesterday, U.S. stocks reversed from negative territory to rally in afternoon trading after New York Federal Reserve President John Williams said the central bank needed to “act quickly” amid a slowing economy. The influential policy maker later clarified his remarks by stating the speech was based off academic research and was not an indication that the Fed will cut interest rates at July’s FOMC meeting. Treasuries are weakening with the yield on the 10-year note up one basis point to 2.04%. On the data front, a preliminary reading showed consumer sentiment ticked slightly higher in July to 98.4, compared to June’s 98.2 reading. In commodities, WTI crude is off 0.5% to $55.05/barrel, on pace for a weekly loss of roughly 7%.
Opening Comment — July 19, 2019
DJIA: 27,222.97
S&P 500: 2,995.11
Nasdaq Composite: 8,207.24
U.S. Futures Indicate Higher Open Friday
The major averages are poised to advance Friday as investors remain optimistic that the Federal Reserve will lower interest rates. The Dow is adding 0.4% while the S&P 500 and Nasdaq 100 are climbing 0.2% and 0.3% respectively.
Yesterday, U.S. stocks rallied in afternoon trading after New York Federal Reserve President John Williams said the central bank needed to “act quickly” amid a slowing economy. The influential policy maker later clarified his remarks by stating the speech was based off academic research and was not an indication that the Fed will cut interest rates at July’s FOMC meeting. Treasuries are weakening in early trading with the yield on the 10-year note up two basis points to 2.05%. The economic calendar is light today with a preliminary reading on consumer sentiment levels in July the lone update. In commodities, WTI crude is adding 1.3% to $56.02/barrel, but remains pace for a weekly loss of roughly 7%.
In earnings news, Microsoft is advancing 2.7% after the IT giant topped earnings estimates and revealed strong revenues in its cloud business. Elsewhere, Blackrock is off 0.2% after the world’s largest asset manager missed profit estimates. In M&A news, Anheuser-Busch InBev is adding 4.3% after announcing the sale of its Australian business unit for $11.3 billion.
Overseas, European markets are mostly higher near midsession with the STOXX 600 adding 0.2%. Germany’s DAX is up 0.1% while the FTSE 100 is gaining 0.2% in London. In Asia overnight, Japan’s Nikkei jumped 2% while China’s Shanghai Composite climbed 0.8%.