As the old-time civil servants used to say after a strenuous day of shuffling some government papers around for hours, just before punching out their time cards – “another day, another dollar!” After four straight lower Dow closes from where the highs of the day had been but up for the session nevertheless, whose details were well described in the last few daily notes, the market yesterday sort of ignored that dynamic with the major indices not really fading into the close, although once again the best level of the Dow was reached early with a gain 101 to 19,987. This will now be the number to beat on the upside if a new intraday record is going to be achieved. But after a few jiggles to the downside with the “worst level” so to speak being still a gain of 57 points, the Dow did make a late upside spurt to end with a closing advance of 91 to 19,974 which was a record close nevertheless. It was led on the upside by good gains in CAT and NKE of all things, which has been the worst Dow performer this year ahead of its earnings last night.
The S&P added 8 points to 2271, just short of its own record close and the Nasdaq gained 26 to a new record high close of 26 to 5484. It was led by a new high in the shares of NVDA, and also from a good gain in AMZN for a change. Breadth numbers were strong at an almost 2 to 1 upside ratio. The VIX declined down to 11.45 for a loss of .26 and once again everyone should keep their eyes on this one as the closer it gets to the ultimate downside support of 10, the less upside potential the market will have unless it makes some sort of downside move in order to get this number higher.
The Dow has remained lower by around 15 points all day, held back once again by its financial components which have been the upside driving force for much of the past several weeks. The Dow is getting some support from NKE of all things, after a better report last night. The S&P and Nasdaq are also slightly lower as well, but NVDA continues to roll along to the upside at another new all-time high. Once again, the economic calendar is light and we did get one report today with November existing home sales coming in slightly above expectations with a gain of 15.4% and having no influence at all. For the rest of the week we will see – Thursday – weekly jobless claims, the final revision of third-quarter G.D.P., currently at 3.2%, November personal income and spending and the November L.E.I. report; Friday – November new home sales and the final U. of Michigan December Consumer Sentiment Survey. Other companies reporting earnings this week include – tonight – MU, BBBY; Thursday – CALM and CAG, Stocks that reacted to earnings today are NKE with a slight gain and high-flying FDX setting back a little after its tremendous run of late to new all-time highs. In addition, retailer FINL is doing poorly after its results were released as well.
The VIX is slightly lower at 11.27 for a decline of .18 which is not good because if the market is going to go lower, then let the VIX go higher because then it pushes this number further away from its ultimate downside support at 10. Bond yields are just about unchanged as is gold while crude oil is up a bit to around $53 a barrel.
Unless something dramatic happens between now and the close, it would appear that 20,000 is going to have to wait another day and we shall see if the market is going to give everyone a holiday present before the long weekend, not that it hasn’t done so already with its tremendous gains over the past several weeks
Donald M. Selkin
Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide our customers with timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: {Bloomberg Financial, Reuters, Associated Press}.