Markets Continue to Notch Record Highs!

U.S. equities were slightly higher, achieving more record highs, courtesy of strength in the technology and energy sectors. Crude oil prices rallied on turmoil in the Middle East amid a corruption crackdown in Saudi Arabia, while Broadcom’s unsolicited $105 billion takeover proposal for Qualcomm, and a chip deal between Dow member Intel and AMD, gave techs a boost. Treasury yields and the U.S. dollar were a tad lower amid a dormant economic calendar, while gold was higher.

The Dow Jones Industrial Average (DJIA) rose 9 points to 23,548, the S&P 500 Index advanced 3 points (0.1%) to 2,591, and the Nasdaq Composite increased 22 points (0.3%) to 6,786. In moderately heavy volume, 852 million shares were traded on the NYSE and 2.2 billion shares changed hands on the Nasdaq. WTI crude oil jumped $1.71 to $57.35 per barrel and wholesale gasoline gained $0.04 to $1.83 per gallon. Elsewhere, the Bloomberg gold spot price was $11.53 higher at $1,281.44 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.2% lower at 94.75.

Treasuries finished higher amid a dormant economic calendar, as the yield on the 2-year note was flat at 1.61%, while the yields on the 10-year note and the 30-year bond dipped by 1 basis point to 2.32% and 2.80%, respectively.

The yield curve flattened and the U.S. dollar was little changed last week as the markets assessed the likelihood of a December rate hike by the Fed and President Trump’s pick of Fed Governor Jay Powell as the next Chairman of the Central Bank. Also, global economic data continues to paint a positive picture and tax reform remains a source of uncertainty in the wake of last week’s House bill.

The week’s relatively light economic calendar will get moving tomorrow with the release of the JOLTS Job Openings report, with the measure of unmet demand for labor forecasted to show 6.1 million jobs were available to be filled during September, matching that seen in August, while in the final hour of trading consumer credit will be reported, with consumer borrowing for September expected to have increased to $17.8 billion from the $13.1 billion registered in August.

Schwab Center for Financial Research – Market Analysis Group

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