After yesterday’s third straight decline, the markets started out in a mixed fashion today. The DOW was able to reach its best level of the session with a 45 point advance at 10 AM, led by ongoing advances in the healthcare components JNJ and UNH. Other indices followed with proportionate gains…but then things started to chop lower.
The NASDAQ was doing a bit better also today in the early going…led by PCLN at a further new all-time high in addition to AMZN. Declines in AAPL and TSLA were restraining it to some extent. The Dow was hurt by large declines in CAT for the second day in a row and by IBM, which had done well this year. SPLS did poorly on its report and SHLD was higher after its results.
At the close today, the DOW was up 2 points, the NASDAQ and S&P 500 each managed a 1 point gain.
Weekly jobless claims rose from last week’s historically low number with a gain of 30,000 up to 243,000. However, this is still the 105th straight week of claims under 300,000. February import prices rose by 4.6%, the highest rate in five years. This was obviously a function of higher energy prices. This will likely ease off in March as oil prices have come down to their lowest level since last December…but its probably too late to prevent the Fed from raising rates next week. If tomorrow’s jobs report is awful, a number below 170,000, this may translate into a different story for the Fed.
Breadth numbers were slightly negative today. The VIX was higher once again up to 12.30. The decline in the VIX down to 10.86 a week ago Friday told the tale that things were due for a setback. Tomorrow’s jobs report could continue or reverse this recent lower trend. On the other hand, one should ask, “What would be considered a friendly report or a negative one?” I would like to think that if the number came in around the current consensus of 190,000 or a little lower, this might put a damper in the Fed’s interest in raising rates next week.
Donald M. Selkin
These are excerpts from Don Selkin’s Daily Market Notes, abbreviated and updated with permission from the author. 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 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, and the Associated Press.