Dow Jones Futures – Nov 18 – 22, 2019
S&P 500 Futures – Nov 18 – 22, 2019
Nasdaq Futures – Nov 18 – 22, 2019
Monday – November 18
All three US indexes advanced to new highs today but pulled back after investors got wind of an overnight report stating that Chinese officials may be less optimistic on the progress of US-China trade negotiations. China, according to its state-owned media, was under the impression that the US had agreed to roll back tariffs. It was therefore troubled when President Trump’s tweeted last week that such an agreement hadn’t been sealed.
Meanwhile, the only major economic report of the day, the housing market index, showed a slight dip, coming in at 70, just a point below the consensus estimate of 71.
The Dow closed up 0.1% or 31.33 points at 28,036.22. The S&P 500 ended the day higher by 0.05% at 3,122.03. The Nasdaq closed at 8,549.94, or 0.1% higher. With gold moving 0.2% higher (closing at $1,471.90 per oz) and the 10-year yield falling 1.85%, such moves indicated a slight influx toward safe haven assets on the part of investors.
Tuesday – November 19
The Dow, S&P 500, and the Nasdaq hit all time highs today but only the Nasdaq was able to maintain its advance heading into the close. Despite support from Q3 corporate earnings, with three quarters of all S&P 500 companies topping analyst expectations, a few reversals were weighty enough to stem the mighty advances in the broader market. Reversals today consisted mainly of Dow components Boeing (-1.5%) and Home Depot (-5.4%).
Boeing’s slide is attributable to the National Transportation Safety Board’s recommendation that the company redesign engine covers for 737 planes numbering in the thousands. Home Depot’s slide had to do with disappointing results on same-store sales figures.
Housing starts showed acceleration in residential investment as the figures came in at 1.314 million, higher than the expected 1.320 consensus. Permits were well above expectations at 1.461 million, the strongest figures since 2007, topping economist expectations of 1.378.
The Dow closed down 102.20 points or -0.3% at 27,934.02. The S&P 500 slid 0.06% to close at 3,120.18. The Nasdaq meanwhile edged higher 02% to close at 8,570.66, am all-time closing high.
Wednesday – November 20
Once again, stocks fall as market sentiment sours on a Reuters report that a phase one trade deal may not be reached by the end of the year. According to the report, trade experts close to the Trump Administration say negotiations for phase one can extend well into 2020 as China seeks a greater degree of tariff rollbacks. Yesterday Trump threatened higher tariffs on Chinese goods should the two nations fail to make a deal.
Meanwhile, the FOMC minutes released today reaffirms the neutral policy outlook Fed Chair Powell announced in his last FOMC press conference. After three consecutive rate cuts, the central bank now sits on the sidelines, monitoring economic growth measures that may or may not signal a “material reassessment” of their current monetary policy. The Fed noted a positive outlook for the US economy, though they mentioned concerns of elevated geopolitical risks and trade tensions as well as a “prominent” risk of a slowdown in global economic growth.
The Dow fell 112.93 points or -0.4% closing at 27,821.09. The S&P 500 also pulled back -0.4% to 3,108.46. The Nasdaq slipped -0.5% to end the day at 8,526.73.
Thursday – November 21
The broader stock market slid again, this time for the third consecutive day, as the US-China trade war continues to strain investor optimism. Today’s three-day losing streak marked the longest consecutive losing period since last August.
A report from the South China Morning Post stated that US tariffs scheduled to go into effect on December 15 may be delayed, and that its not necessarily contingent on the signing of a phase one trade deal.
As reported on CNBC, Randy Frederick, Charles Schwab’s VP of trading and derivatives, noted what many investors are already beginning to suspect, that both nations “don’t know what they want to do on a trade deal,” commenting on the obvious, if not tiring, back-and-forth “every single day it’s something different” matter–“they’re close to a deal” and “they’re not close to a deal.”
On the employment front, jobless claims came in at 227,000, slightly more than 217,000 that economists had anticipated. Existing home sales came in strong at 5.460 million, stronger than the consensus figure of 5.360 million. The figures, likely attributable to higher levels of employment, adding to that more favorable mortgage rates, are lifting a sector toward year’s end from a previously flat position. The Philadelphia Fed Business Outlook Survey came in at 10.4, higher than the anticipated 7.0 consensus.
By day’s end, the Dow slid 54.8 points, or -0.2% to close at 27,766.29. The S&P 500 closed at 3,103.54, pulling back -0.16%. The Nasdaq Composite fell by -0.2%, ending the day at 8,506.21.
Friday – November 22 (intraday)
Reporting mid-day, stocks appear to be breaking their 3-day losing streak though the S&P 500 may be posting its first weekly decline in over a month. The positive market sentiment is due to, you guessed, US-China trade talks, as President Trump told Fox News that the two nations “have a very good chance to make the deal.” President Xi seems to echo this sentiment, though he did mention that China is not afraid to “fight back” should negotiations make an unfavorable turn. This ends the week with yet another cliffhanger in a series of cliffhangers surrounding this “phase one” deal.
In terms of today’s economic reports, consumer sentiment came in at 96.8, higher than the 95.7 expectations. This is perhaps the highest reading since July, one that shows steady recovery from its low point in August, sentiment pressured by tariff-related matters. At the moment, inflation expectations remain muted while the impact of impeachment proceedings aren’t yet evident.
The PMI composite flash came in at 51.9, higher than economist expectations of 51.2. Manufacturing data came in at 52.2 while Services showed 51.6 (both higher than the respective 51.5 and 51.0 consensus).
Optimism surrounding US-China negotiations have contributed to the record highs we’ve seen in the indexes. Over the month, the Dow and S&P are up approximately 4% while the Nasdaq has risen a little over 5%. As headline risk has given the market positive volatility, the broader market, arguably, remains vulnerable to its flip side.
Currently (intra-day), the Dow has advanced 109.33 points, or +0.39%, now trading at 27,875.62. The S&P 500 is trading at 3,110.29, up +0.22%. The Nasdaq is up +0.16%, currently trading at 8,519.88.
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