Comments from Fed Chief Jerome Powell over the weekend, a rebound in retail sales from December’s surprising decline, and continued trade optimism helped U.S. equities to finish higher and recover some of last week’s declines. However, gains for the Dow were held in check, with pressure coming from Boeing following news of a second crash of its 737 MAX 8 aircraft in five months. Treasury yields were higher, along with crude oil prices, but gold and the U.S. dollar were lower.
The Dow Jones Industrial Average (DJIA) rose 201 points (0.8%) to 25,651, the S&P 500 Index gained 40 points (1.8%) to 2,783, and the NASDAQ Composite jumped 150 points (2.0%) to 7,558. In moderately-heavy volume, 919 million shares were traded on the NYSE and 2.2 billion shares changed hands on the NASDAQ. WTI crude oil gained $0.72 to $56.79 per barrel and wholesale gasoline was up $0.03 at $1.83 per gallon. Elsewhere, the Bloomberg gold spot price fell $4.91 to $1,293.39 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—declined 0.1% to 97.18.
Advance retail sales for January rose 0.2% month-over-month (m/m), versus the Bloomberg forecast of a flat reading, and December’s 1.2% drop was revised lower to a 1.6% decrease. Last month’s sales ex-autos were up 0.9% m/m, compared to expectations of a 0.3% gain and December’s negatively-revised 2.1% fall. Sales ex-autos and gas advanced 1.2%, compared to estimates of a 0.6% gain, and December’s figure was revised lower to a 1.6% decline. The control group, a figure used to calculate GDP, increased 1.1%, versus projections of a 0.6% rise, and compared to December’s negatively-revised 2.3% drop. The rebound from December’s drop came as sales at building material & garden, along with sporting goods, hobby, musical instrument and book stores all jumped, while non store retailer sales—which include online activity—gained solid ground. Sales of autos, clothing and furniture, and at gas stations, were lower during the month.
Business inventories rose 0.6% m/m in December, matching forecasts, while November’s 0.1% dip was upwardly revised to a flat reading.
Treasuries were lower, as the yields on the 2-year and 10-year notes, as well as the 30-year bond, were up 2 basis point (basis point) to 2.48%, 2.64% and 3.03%, respectively.
©2019 Charles Schwab & Co., Inc., Member SIPC. All rights reserved.
Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.