The
trading strategy this website uses as its signature tool is our bullish and
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At the bottom of this post are the all-time numbers since the current alert was
made.
Market Direction: BULLISH alert issued 1/10/2019
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Stock benchmarks closed Wednesday in
positive territory, but off their intraday highs, as investors reacted to
upbeat comments on U.S.-China trade talks but weighed a shaky private-sector
employment report.
What
did the major indexes do?
The Dow Jones Industrial Average DJIA, +0.15% rose 39 points, or roughly
0.2%, to 26,218.13, but had been as high as 26,282. Meanwhile, the S&P 500
index SPX, +0.21% gained 6.16 points, or 0.6%, to
2,873.40. The Nasdaq Composite Index COMP, +0.60% added 46.86 points, or 0.6%, to 7,895.55.
The S&P had been up as much as 18 points, while the Nasdaq rose roughly 90
points at its peak. DJIA, +0.15%
Wednesday’s session left the S&P
500 just 2% below its all-time closing high of 2,930.75, hit on Sept. 20.
What
drove the market?
U.S. stocks followed the lead of
global equities, which rallied on a report over progress with trade talks
between the U.S. and China. “Ninety percent of the deal is done, but the last
10% is the hardest part, it’s the trickiest part and it will require trade-offs
on both sides,” said Myron Brilliant, executive vice president for
international affairs at the U.S. Chamber of Commerce, adding that talks are in
the “endgame stage,” according to the Financial Times.
High-level discussions that began in
Beijing last week were set to resume Wednesday in Washington, as China’s Vice
Premier Liu He prepared to meet with U.S. Trade Representative Robert
Lighthizer and Treasury Secretary Steven Mnuchin. The parties hope to set the
stage for a summit between President Donald Trump and Chinese President Xi
Jinping, where a final trade agreement could be signed as early as this month,
though the timing of a deal remains uncertain.
Meanwhile, the Caixin China services
purchasing managers index, which gauges the country’s private sector, rose to a
14-month high in March. Upbeat data from China at the start of the week helped
to drive strong gains for U.S. stocks Monday, amid relief that a shaky
global growth outlook was stabilizing.
Tempering trade optimism was a
disappointing jobs report from payroll services firm ADP, which estimated the
U.S. private sector added 129,000 jobs in March, the weakest reading in 18 months and below consensus
expectations of 165,000, according to an Econoday survey of economists.
Though the ADP report doesn’t always
track closely to the official government estimate of job growth, due on Friday,
economists worried that it could be signalling weakness in the labor market.
Low unemployment and optimistic U.S. consumers have been the main factors
pointed to by stock-market bulls as reason to believe the current economic
expansion has more room to run.
Federal Reserve policy was also in
focus after a report by the Wall Street Journal described the
president’s growing frustration with Fed Chairman Jerome Powell, whom he has
repeatedly criticized to “Republican senators, supporters and staffers” for
Powell’s decision to raise interest rates four times in 2018. The president
reportedly believes that the economy would be stronger and the stock market
more buoyant absent these moves.
The president blames Mnuchin for
recommending Powell for the job, while reportedly telling Powell in a recent
phone conversation that “I guess I’m stuck with you.”
The
S&P 500 just 2% away from all-time closing high
Which
stocks were in focus?
Pilots at the controls of the 737
Max aircraft that crashed last month in Ethiopia initially followed emergency
procedures laid out by plane maker Boeing Co. BA, -1.54% but still failed to recover control, the Wall Street Journal reported, citing people
briefed on the preliminary findings of the crash probe. Boeing stock fell 1.5%
Wednesday.
Shares of GameStop Corp. GME, -4.65% closed 4.7% lower Wednesday.
The company late Tuesday issued guidance that was lower than what Wall
Street forecast.
Shares of Blue Apron Holdings
Inc. APRN, +7.34% were in focus, after the
meal-delivery company late Tuesday said Chief Executive Bradley J. Dickerson had resigned.
The company appointed former Etsy executive Linda Kozlowski to replace him.
Shares rose 7.3%.
Signet Jewelers Ltd. SIG, +0.54% stock rose 0.6%, after the jeweler reported fiscal fourth-quarter sales and earnings
that beat expectations.
Shares of Tyson Foods Inc. TSN, -0.48% were in focus after a subsidiary of
the processed foods company, AdvancePierre Foods Inc., announced a recall of more than 20,000 pounds of
ready-to-eat beef patties. The stock fell 0.5% Wednesday.
What
other data was in focus?
Markit’s March services purchasing
managers index came in at 55.3, above consensus expectations of 54.8, according
to FactSet. A reading of at least 50 indicates improving conditions, while
those below that level denote contraction.
The Institute for Supply
Management’s services sector gauge fell to 56.1% in March, down from 59.7% in
February. Economists polled by MarketWatch had expected a 58.1% reading.
What
were the analysts saying?
Between last month’s jobs report and
today’s ADP report, it seems like the job market “is rolling down,” Mike
Loewengart, vice president of investment strategy at E-Trade, wrote in an
email. “Over the past five years it’s one of the lowest reads,” he added.
“That said, we’re far from crisis
levels,” he added, though the combination of two straight underwhelming reports
means “We’ll be closely watching Friday’s jobs data to see if this trend
persists.”
“Stocks are rallying on hopes for a
better-than-expected trade deal as senior U.S. and Chinese officials meet in
Washington this week,” Alec Young, managing director of global markets research
at FTSE Russell, wrote in an email.
“Trade matters because it could
impact corporate earnings,” as tariffs increase costs, while their removal
would raise earnings expectations, he added. “The catch is that Washington
would need a credible enforcement mechanism by which to ensure Chinese
compliance with any deal. That would come in the form of an ability to quickly
re-impose tariffs should the Chinese fail to comply.”
How
did other markets trade?
Stock markets in Asia rallied Wednesday, with Japan’s Nikkei NIK, +0.26% closing 1% higher, and Hong Kong’s
Hang Seng Index HSI, -0.03% and the Shanghai Composite SHCOMP, +1.08% both adding 1.2% on the day.
European markets were also buoyant, with the Stoxx Europe 600 SXXP, +1.01% rising 1%, its fourth consecutive
day of gains.
In commodities markets, the price of
crude oil CLK9, -0.02% fell, threatening to snap its three-day winning streak,
while the price of gold GCM9, +0.01% was virtually unchanged. The U.S. dollar DXY, -0.03% meanwhile, retreated 0.3% against its peers.
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The all-time highs since our initial
recommendation to go LONG
this market. Here is how the markets have performed:
Stock Market
Direction Recommendation (1/10/2019)
|
||
Dow
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up 2,280.27 points a 9.50% gain
|
4/3/19
|
Nasdaq
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up 952.19 points a 13.63% gain
|
4/3/19
|
S&P 500
|
up 288.61 points a 11.11% gain
|
4/3/19
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Related Link: http://www.stockmarket-direction.com/
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