Stock Rebound Continues…..

U.S. stocks extended a recent rebound and are on track for a third-straight weekly gain, courtesy of continued trade optimism and an apparent carry over of support from recent dovish Fed commentary. Stocks shrugged off an earnings warning from Samsung, disappointing Eurozone economic data and the continued partial government shutdown. Union Pacific rose after announcing a new COO, Dow member Verizon’s Q4 subscriber figures seemed to please the Street and the healthcare sector remained in focus. Gold declined, while Treasury yields, the U.S. dollar and crude oil prices moved higher.

The Dow Jones Industrial Average (DJIA) rose 256 points (1.1%) to 23,787, the S&P 500 Index added 25 points (1.0%) to 2,574, and the Nasdaq Composite increased 74 points (1.1%) to 6,897. In moderately heavy volume, 1.0 billion shares were traded on the NYSE and 2.3 billion shares changed hands on the Nasdaq. WTI crude oil rose $1.26 to $49.78 per barrel and wholesale gasoline was $0.02 higher at $1.36 per gallon. Elsewhere, the Bloomberg gold spot price declined $3.75 to $1,285.46 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—advanced 0.3% to 95.93.

Consumer credit, released in the final hour of trading, showed borrowing was $22.2 billion during November, below the downwardly-revised $25.0 billion posted the month prior, but above estimates of $17.5 billion.

Treasuries were lower, with the yield on the 2-year note gaining 4 basis points (bps) to 2.58%, the yield on the 10-year note rising 3 bps to 2.72%, and the 30-year bond rate ticking 1 basis point higher to 3.00%.

Tomorrow, although a host of economic reports will remain postponed due to the partial government shutdown, we will still get the release of weekly mortgage applications from the MBA. However, the report that will likely carry the most weight will be the release of the minutes from the Fed’s December meeting, after which the Central Bank raised rates for the fourth time in 2018 and appeared to unnerve the markets with its statement that was less dovish than some had hoped.

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