Wed, 24th May 2017

Anirudh Sethi Report


Archives of “US Market” Category

Overnight US Market :Dow closes back above 20,000, Nasdaq hits record

Banks and other financial companies led stocks higher on Wall Street Friday as President Trump prepares to scale back financial industry regulations. Buyers were also encouraged by a pickup in hiring in January. Small-company stocks, which stand to benefit more than others from stronger economic growth, make sharp gains.

The Dow Jones industrial average jumped back above the 20,000 level as the blue-chip index rose 186.55 points, or 0.9%, to close at 20,071.46. The Standard & Poor’s 500 index gained 16.57, or 0.7%, to 2297.43, moving within one point of its record closing high of 2298.37. The Nasdaq composite index added 30.57, or 0.5%, to set a new record closing high of 5666.77.

The Russell 2000 index of smaller-company stocks climbed 1.5% to 1,377.84. Smaller, domestically-focused companies may have more to gain than their larger peers from faster growth in the U.S. The Russell made large gains at the end of 2016 based on those hopes.

The stock market rally kicked off early after the government reported that U.S. employers added 227,000 jobs in January, higher than last year’s average monthly gain of 187,000 and a sign that President Donald Trump has inherited a robust job market. The unemployment rate ticked up to a low 4.8% from 4.7% in December, but for a good reason: More people started looking for work. The percentage of adults working or looking for jobs increased to its highest level since September.

Financial firms rose after President Donald Trump took his first steps aimed at scaling back regulations on the industry. He signed an order that directs the Treasury Secretary to look for potential changes to the Dodd-Frank law, which reshaped financial regulations after the 2008-09 financial crisis and created the Consumer Financial Protection Bureau.

The order doesn’t have any immediate impact, but suggests Trump is intent on reducing regulations, which could boost profits for financial companies and banks.

Dow components Visa (V) and Goldman Sachs (GS) jumped 4.6%, JPMorgan Chase (JPM) added 3.1% and American Express (AXP) gained 2%. Smaller banks, which could find it easier to lend money if regulations are cut, also traded higher.

Overnight US Market :Dow closed -6 points.

Stocks closed mixed Thursday as investors shied away from riskier assets amid renewed concerns over U.S. President Donald Trump’s policies and didn’t find much to get excited about in the latest batch of earnings reports from U.S. companies.

The Dow Jones industrial average fell 6.03, or less than 0.1%, to 19,884.91. The Standard & Poor’s 500 index rose 1.30, or 0.1%, to 2280.85 and the Nasdaq composite index fell 6.45 points , or 0.1% to 5636.20.

Investors were rattled by the latest news from the Trump administration, including a phone call in which he warned Mexico’s president he might send in troops and another about a tense exchange with Australia’s leader over refugees. Following the Trump rally in the wake of his election victory last November, stock gains appear to be petering out with investors getting jittery in light of Trump’s dramatic policy announcements since taking office.

Investors are also looking to Friday’s closely watched jobs report, the first that will be under the tenure of President Trump. Economists expect employers created 175,000 jobs in January, and the unemployment rate remained at 4.7%.

Overnight US Market :Dow closed +27 points

U.S. stock indexes closed slightly higher Wednesday after a mixed day on Wall Street as gains in technology companies were offset by weakness in other sectors.

Apple shares jumped 6% to its highest level in more than a year Wednesday after reporting a day earlier that sales of iPhones turned higher after a slump.

Apple reported first-quarter profit and sales that were better than analysts expected. The company said consumers snapped up its new iPhone 7 and 7 Plus, and that ended the first-ever slump in iPhone sales. Apple stock rose $7.44 to $128.79.

The big gains for Apple, the world’s most valuable publicly-traded company, took technology stocks higher. The Nasdaq composite index rose 27.86, or 0.5%, to 5642.65.

Other major indexes posted smaller gains. The Dow Jones industrial average rose 26.85 points, or 0.1%, to 19,890.94. The Standard & Poor’s 500 index eked out a gain of 0.68 to 2279.55.

Bond prices fell. The yield on the 10-year Treasury note jumped to 2.48% from 2.44%. Financial stocks rose, as higher interest rates allow banks to charge more money for lending.

Oil prices stayed within a small range. U.S. crude added $1.07, or 2%, to $53.88 a barrel in New York. U.S. oil has stayed between roughly $52 and $55 a barrel for the last two months.

Overnight US Market :Dow closed -107 points.

U.S. stocks fell Tuesday as the market fallout of Trump’s travel ban on seven Muslim-majority countries continues to take a toll and investors digest weak fourth-quarter results from companies including UPS and Under Armour.

Industrial companies are down the most, but health care companies offset some of the losses. As they look for less risky investments, buyers are moving money into bonds and stocks that pay large dividends, like utilities.

The Standard & Poor’s 500 index  fell for a fourth straight day, its longest losing streak since before the presidential election in November. But the losses have been fairly small, and for the second day in a row, stocks recovered some of their losses late in the day.

The Standard & Poor’s 500 index fell 2.03 points, or 0.1%, to 2278.87. The Dow Jones industrial average dropped 107.04 points, or 0.5%, to 19,864.09.  The Nasdaq composite index was able to cut its losses and closed up 1.07 to 5614.79.

Bond prices rose as investors snapped up bonds. The yield on the 10-year Treasury note fell to 2.45% from 2.49%. That hurt financial stocks, as lower bond yields reduce interest rates and the profits those companies make from lending.

Investors who want income also bought stocks that pay outsize dividends, including real estate investment trusts and utility companies. Gains for those stocks limited the market’s losses overall.

In earnings news:

Overnight US Market :Dow closed -122.65 (Intraday was down 223 points )

S&P down -0.61%. Nasdaq -0.83%

The US major indices are ending the day in the red, BUT well off the lows.
  • The S&P is ending the day at 2280.87, down -13.79 points, but traded as low as 2268.04.  It was down -0.61% on the day
  • The Nasdaq is ending the day at 5613.11, down -47.07 points, but traded as low as 5578.75.   It closed down -0.83%
  • The Dow fell back below the 20K level and closed at 19971.13, down -122.65 points or -0.61%. The low reached 19870.39
So although lower, it was much worse.
In Canada, the TSX index closed down -175.89 points or -1.12%. It closed at 15401.79. The low reached 15366.68.

Overnight US Market :Dow closed -7 points.

Nasdaq leads the charge today/this week

The US major stock indices are ended the day mixed.
  • S&P is down -1.99, points
  • Nasdaq is up 5.61 points
  • Dow is -7.3 points
For the week, the major indices all closed with gains:
  • S&P index is up 1.02%
  • Nasdaq was the biggest gainer, rising by1.90%, and the
  • Dow is ending the week with a solid gain of 1.34%
The Dow moved and closed above the 20,000 level for the first time ever on Wednesday, and traded as high as 20125.58 on Thursday. Today was spend mostly down but with small losses. The index is closing at 20093.51. The Nasdaq and S&P also closed at record highs in trading this week.

Dow 20,000? It’s 30,000, Actually!

Start with the last point. Correct for mistakes dating from the days of paper and slide rule, and the Dow in fact passed 30000 for the first time last month, according to Birinyi Associates calculations.

The biggest mistake came from the simplistic recalculation of the average when it was expanded from 12 to 20 stocks. The official Dow record shows a drop of 24%—its worst-ever day—when the market reopened in 1914 after a four-month break because of the start of World War I. In fact, the market and the Dow rose that day, but the record was recalculated without any adjustment when the measure expanded from 12 to 20 stocks two years later. Because some of the new stocks added had lower prices, the new version of the average was pulled down. So, no, there really isn’t any reason to get worked up about the average passing 20000.

Its amusing silliness!

click for ginormous graphic

We’re Already at Dow 30000, You Just Don’t Know It
The blue-chip index is a poor measure of what investors are doing
James Mackintosh
Wall Street Journal, Jan. 25, 2017