Today, the Nasdaq joins the S&P at record closing levels.
The Nasdaq has been playing catch up over the last 8 trading days (eight straight up days) and in the process has been able to move to a new record high, taking out the June 8th high close of 6321.76. Today’s close comes in at 6344.30, up 29.874 points or +0.47%.
The S&P inched up by 1.47 points or 0.06%. That was good enough to move above the July 14 high at 2459.27. The index closed at 2460.61 today.
The Dow was the dog today as it fell -54.99 points or -0.25% to 21574.73. The high close was on July 14th at 21637.74.
IBM earnings are out and their EPS beat at $2.97 vs $2.74 but the revenues are a miss – $19.29B vs 19.46B estimate.
The demonetization effect and the resultant slowdown in household spending and corporate investment were evident in the fall in GDP growth estimates released by the government today. The GDP growth for the Financial Year 2017 (FY17) was reported at 7.1% while for the fourth quarter of the Financial Year 2017, the GDP growth stood at 6.1%. The growth of the farming sector stood at 5.2% for the fourth quarter FY17 while for manufacturing sector it was 5.3%. The GDP growth data for 2016-17 factors in the rebased index of industrial production (IIP) and wholesale price index (WPI) data. Earlier this month, new sets of IIP and WPI data, with the base year changed to 2011-12 from the earlier 2004-05, were released. New categories of goods were added and weightages were also changed to bring the two indices more in tune with current consumption trends. Growth in Gross Value Added (GVA) in the fourth quarter FY17 was 5.6% versus 8.7% in the corresponding quarter in the previous fiscal, while in the third quarter FY17, GVA growth was 6.7% versus 7.3% in the third quarter of FY16.
In the second advance estimates released in February, the government had estimated that the growth in GVA, which is GDP minus net taxes, will slow down to 6.7 percent in 2016-17 or 1.1 percentage points lower than 7.8 percent GVA growth in 2015-16.
For the entire FY17, GVA in mining was at 1.8% falling sharply versus the 10.5 % recorded in FY16, while that for agriculture was at 4.9% in comparison to the 0.6% registered in FY16. Similarly, GVA for construction sector for the entire Financial Year 2017 was at 1.7% versus the 5% recorded in FY16, while for real estate sector GVA for the entire FY17 stood at 5.7% versus the 10.8% registered in FY16.
The GDP growth in FY16 revised to 8% from the 7.9% recorded earlier. FY15 GDP growth was revised to 7.5% from the previously recorded 7.2%. Similarly, FY14 GDP growth was revised to 6.4% from the 6.5% recorded earlier.
The S&P 500 and Nasdaq Composite inched forward just 0.7 and 4.9 points respectively to new highs on Friday.
The US stock indices were nearly unchanged throughout the trading day and the S&P 500 ended flat at 2,415.80 while the Dow Jones Industrial Average was also nearly unchanged at 21,080.11. The Nasdaq Composite eked out a modest 0.1 per cent gain to end the day at 6,210.20.
For the S&P 500, the record close was the 20th closing high of this year and the 28th record high since the US presidential election. In all of 2016, by comparison, the S&P 500 notched 18 record closings, according to data from S&P Dow Jones indices.
Despite the three record closings this week, the S&P 500 was up just 1.4 per cent from last Friday, with gains in the utilities, information technology and consumer staples sectors, making up for a sell off in the energy sector.
The price of oil had its steepest fall on Thursday in three weeks after Opec said it would extend output cuts as investors appeared disappointed by the agreement. After paring back some losses on Friday, however, Brent crude settled 2.7 per lower for the week. Stocks within the S&P 500 energy index lost 2.2 per cent over the same period.
Elsewhere, the US dollar index measuring the buck against a basket of its peers was also 0.28 per cent higher at 97.417.
MSCI will on June 20 announce whether it would finally include China’s domestic A-shares in its global indices.
The US index provider last June delayed for a third straight year the A-shares’ inclusion into its benchmark $1.5tn emerging markets stock index, citing regulation worries and accessibility for global investors.
Inclusion on the index would have been a major step forward for Beijing as it attempts to open up its financial markets and attract foreign capital.
Ahead of this year’s decision, China has embarked on a series of new actions aimed at addressing these concerns. Its banking regulator has launched a “regulatory windstorm” while the central bank has made the first move to ease capital controls, providing much needed liquidity to the offshore renminbi market.
Meanwhile, BlackRock has for the first time publicly backed the inclusion of onshore stocks in MSCI’s indices and Chinese officials have even criticised dividend-dodging companies, dubbed “iron cockerels”, and promised extra scrutiny.