The DOW decided today, after its recent pitiful performances, that perhaps enough was enough. Following a hesitant opening, it jumped up to a gain of as much as 94 points at 11 AM before settling back down a bit down to finish the day ahead by 69 points. The other indices showed their green side with moderate advances: the NASDAQ finished higher by 16 and the S&P 500 was up 6. The NASDAQ lost a bit of its recent upside pizzazz as AAPL and FB, which reached all-time record highs yesterday, cooled off a bit.
The DOW was led, as it has been on higher days for weeks now, by an upside turnaround in the shares of its financial components AXP, GS, C, BAC, and JPM…perhaps on a stronger final revision of the fourth-quarter G.D.P. Apparently the G.D.P. will show a gain of 2.1% versus the prior 1.9% estimate. The upward revision was a function of a higher statistic for consumer spending that rose by 3.5%. Consumer spending accounts for around 70% of G.D.P.
Another economic report today showed that weekly jobless claims declined by 3,000 down to 258,000. This indicates the labor market remains in good shape.
Earnings hurt the shares of LULU badly to the tune of -15% in the stock price today. Breadth numbers were positive at a 17/13 upside ratio and the VIX is now at 11.54, up 1% today.
Bond yields were a little higher on the revised G.D.P. data. The 10-year Treasury is at 2.41% and the dollar was a little higher as well. The Euro was flat at 1.0676 and the Japanese yen was weaker at 111.85. Gold was hurt by the stronger dollar and fell to $1,244 per ounce. Crude oil ended the day up 1.6% to $50.33 a barrel.
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.