Despite the strong probability of a government shutdown, the House of Representatives passed a temporary funding bill that will keep the government operating until February 16th. The Senate hasn’t bought into this yet, as the debate goes on into the evening on Capitol Hill. The markets didn’t see to care much, as the major indices all went up again today. The DOW gained 53, the S&P 500 added 12, and the NASDAQ was 40 points higher.
AXP and IBM dragged on the DOW following their earnings reports. AXP had its first quarterly loss in 26 years. IBM finally showed some revenue growth and its strong move to the upside lately meant that it was vulnerable to the “buy the rumor, sell the news” syndrome.
Breadth numbers were positive at an 18/12 upside ratio. The VIX finally declined nearly 8% to 11.47 after what seemed to be a ridiculous move higher lately.
Today was another record for the S&P 500. The index has now run 395 straight days without a decline of 5%. This is the longest time ever for this measure of low downside volatility. This is now the third straight week of gains for the three major indices. It is the eighth higher week out of the past nine for the DOW and S&P 500. The NASDAQ has been higher for five out of the last six weeks. The NASDAQ was led by gains in AMZN, FB and NVDA at a new high, plus GOOG.
Bond yields continued to sneak higher with the 10-year Treasury Note at 2.64%. This rate is the highest since June 2014. The 2-year is at 2.06%, the highest in nine years. The Euro was little changed while the Japanese yen grew stronger at 110.6 versus the dollar. Gold was higher at $1,333 an ounce while crude oil was lower at $63.31 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 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, and the Associated Press.