Market Direction Mid Week: After Hours FB Down

The trading strategy this website uses as its signature tool is our bullish and bearish alerts. This indicator has effectively been used with accuracy since 2011. The website helps our followers stay in tune with the stock market and profits have been amazing. This post provides a mid-week update on how the stock market has preform. At the bottom of this post are the all-time numbers since the current alert was made. The current bullish alert is moving in the right direction.

Market Direction: BULLISH alert issued 10/24/2019

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Stocks ended little changed Wednesday, giving back intraday gains, with better-than-expected results from blue-chip names, including Apple, offset by lingering concerns related to China’s coronavirus outbreak.

The Federal Reserve left its policy interest rate unchanged as expected and said the economy is growing at a moderate pace, but Fed Chairman Jerome Powell acknowledged that the coronavirus epidemic in China introduces “uncertainty” into the outlook and also called asset valuations “somewhat elevated.”

What did major indexes do?

The Dow Jones Industrial Average  DJIA, +0.04% rose 11.60 points, or 0.4%, to end at 28,734.45, while the S&P 500 index  SPX, -0.09% slipped 2.84 points, or 0.1%, to 3,273.40. The Nasdaq Composite Index COMP, +0.06% advanced 5.48 points, or 0.1%, to finish at 9,275.16.

The Dow on Tuesday rose 187.05 points, or 0.7%, to end at 28,722.85, snapping a five-day losing streak and taking back a chunk of the previous session’s decline, which was the steepest one-day fall since October. The S&P 500 which has also suffered its biggest one-day drop since October on Monday, rose 32.61 points, or 1%, to finish at 3,276.24. The Nasdaq Composite closed at 9,269.68, up 130.37 points, or 1.4%.

What drove the market?

Stocks struggled to recover more of the ground lost during Friday and Monday’s selloff sparked by fears a coronavirus epidemic in China would slow global economic growth. By Wednesday there were about 6,000 confirmed cases, and the death toll had risen to 132.

See: As infections reach 6,000, here’s how the illness has spread across the world so rapidly

Investors in U.S. stocks were encouraged by a slew of corporate earnings reports led by Dow component Apple Inc. AAPL, +2.09%   which rose to a record high at $327.25 intraday, before closing up 2% at $324.34. The phone maker reported its second-best quarter for iPhone sales in the company’s history late Tuesday.

See: Analysts divided on how much further Apple shares can climb after ‘blowout results’

“Who cares about a potential global pandemic when Apple reports results like that?” wrote Paul Hickey of Bespoke Investment Group in a Wednesday note.

So far, nearly 25% of S&P 500 companies have reported results for the previous quarter. Of those companies, nearly 72% have beaten analyst expectations, FactSet data shows.

“The current view is that earnings will be up around 10% in 2020, but early-in-the-year estimates generally come down as the year wears on,” Byron Wien, vice chairman for private wealth solutions, at Blackstone, wrote in an annual outlook note.

“Geopolitical uncertainty and the twists in the outlook for the presidential election should create several market corrections of 5%, but none greater than 10%,” he added. “While the economic environment is not particularly strong, investors will become comfortable that the longer-term outlook remains favorable, albeit subdued,” he said.

The Federal Reserve held its benchmark fed funds interest rate steady in a range between 1.5% and 1.75%. on Wednesday, as expected, saying the economy remained on a moderate growth path.

In economic data, the U.S. trade deficit rose 8.5% in the fourth quarter, the Commerce Department said Wednesday.

The National Association of Realtors said its index of pending home sales fell 4.9% in December from the previous month.

See also: The U.S. economy probably grew a ho-hum 2% in the fourth quarter, but there might a few surprises

 

How did other markets trade?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.76%  fell 4 basis points to 1.59%, and has slipped for the past five trading days, to the lowest since October 9 last year.

Oil futures declined Wednesday after the U.S. government data reported domestic crude inventories posted a bigger-than-expected weekly rise. West Texas Intermediate crude for March delivery CLH20, -1.05%   on the New York Mercantile Exchange fell 15 cents, or 0.3%, to $53.33 a barrel.

Gold futures finished with a slight gain on Wednesday, then held ground close to that settlement after the U.S. Federal Reserve left its benchmark short-term interest rate unchanged. February gold GCG20, +0.57%  was at $1,569.90 an ounce in electronic trading, shortly after the Fed policy statement.

The U.S. dollar edged 0.1% higher against a basket of its rival currencies, according to the ICE U.S. Dollar index DXY, +0.04%.

European stocks edged up with the Stoxx Europe 600 SXXP, +0.44%  ending up 0.44% at 419.41.

In Asia overnight, stocks traded mixed, with markets in China closed in an extension of the Lunar New Year holiday enacted as authorities deal with the effects of the coronavirus outbreak. In Hong Kong, the Hang Seng Index HSI, -1.74%  tumbled 2.8%, while Japan’s Nikkei 225 NIK, -1.56% gained 0.7%.

$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at  $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with friends.

The all-time highs since our initial recommendation to go LONG this market. Here is how the markets have performed:

Stock Market Direction Recommendation (10/24/2019)
Dow	up 2,568.09 points a 12.11% gain	1/17/20
Nasdaq	up 1,265.63 points a 15.46% gain	1/24/20
S&P 500	up 327.48 points a 14.68% gain	1/22/20

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