Month: January 2020

The Nasdaq gained 2.27 percent this week, the S&P 500 Index 1.95 percent and the Dow Jones Industrial Average 1.80 percent. Technology pulled the major indexes higher. SPDR Technology (XLK) increased 2.94 percent.

Networking stocks have been strong of late, with iShares Expanded Networking (IGN) returning 3.17 percent.

Defensive shares also performed well on the week. SPDR Utilities (XLU) rose 3.73 percent. Materials and communications services were also strong. SPDR Materials (XLB) and SPDR Communication Services (XLC) rallied 2.65 percent and 2.70 percent, respectively. iShares Edge MSCI Minimum Volatility USA (USMV) climbed 2.45 percent as investors began increasing their volatility protection. Vanguard Dividend Appreciation (VIG) increased 2.45 percent.

The National Federation of Independent Business’ small business confidence index registered a 102.7 reading in December. This was the third year with readings consistently above 100. Prior to 2017, the index hadn’t been over 100 since 2006.

Weekly unemployment fell to 204,000, after hovering near 220,000 level for several weeks. The Empire State index showed an uptick in manufacturing within the Federal Reserve Bank of New York’s geographic region. A similar measure from the Philly Fed showed an even large increase for their region.

Housing stats hit a 13-year high in December, at an annualized pace of 1.608 million. This blew away forecasts of 1.375 million.

Retail sales were stronger than expected last month. Sales increased 0.3 percent and 0.7 percent ex-autos.

The U.S. and China signed the phase-one trade deal this week. The agreement will see an increase in trade between the two countries if both sides follow through. iShares China Large Cap (FXI) increased 1.28 percent.

Crude oil slumped due to fading geopolitical risk and rising inventories. Crude ended the week at $58.70 per barrel.

Shares of J.P. Morgan (JPM) and Citigroup (C) rallied following their earnings beats, while Wells Fargo (WFC) slipped after missing estimates. Morgan Stanley (MS) rose 10.13 percent after the firm beat forecasts. iShares U.S. Financial Services (IYG) gained 1.71 percent on the week.

Stocks added to their 2020 gains today with the S&P 500 Index gaining 0.70 percent. Technology pulled the market higher with SPDR Technology (XLK) gaining 1.35 percent. iShares PHLX Semiconductor (SOXX) rallied 1.27 percent, iShares Expanded Tech Software (IGV) 1.17 percent and iShares Expanded Tech Networking (IGN) 1.56 percent.

A phase-one deal between the U.S. and China will be signed this week. The U.S. lifted its “currency manipulator” designation on Monday after designating China as such in August 2019. Chinese stocks jumped on the news, as did the Chinese currency. iShares China Large-Cap (FXI) gained 1.71 percent. The yuan rallied to its highest level in six months versus the U.S. dollar. The bump from China helped iShares MSCI Emerging Markets (EEM) advance 1.59 percent.

The National Federation of Independent Business’ small-business confidence index for December is out on Tuesday. The reading was 104.7 in November.

The consumer price index increased 0.3 percent in December according to the consensus forecast.

The Empire State index, a gauge of manufacturing activity in the New York Federal Reserve Bank’s territory, is out on Wednesday, along with the Fed’s Beige Book.

Thursday brings December retail sales. Analysts predict 0.4 percent growth and 0.6 percent growth ex-autos. The Philly Fed releases its manufacturing activity index the same day. Several housing data points will also be released this week. The National Association of Homebuilders’ confidence index for January, along with housing starts and permits for December. The advance reading of the University of Michigan’s consumer sentiment survey will be released on Friday.

Earnings season kicks into high gear this week, starting with the larger of large banks. J.P. Morgan (JPM), Citigroup (C) and Wells Fargo (WFC) all report earnings on Tuesday before the bell. Analysts expect $2.35 in earnings from JPM.

Bank of America (BAC), U.S Bancorp (USB), Goldman Sachs (GS) and PNC Financial Services (PNE) deliver results on Wednesday, along with UnitedHealth Group (UNH), Alcoa (AA), CSX Corp (CSX) and SLM Corporation (SLM).

Bank of New York (BK), Synovus Financial (SNV), PacWest Bancorp (PACW), Synchrony Financial (SYF) and First Republic Bank (FRC) report on Thursday along with Kinder Morgan (KMI), Skyworks Solutions (SWKS) and Taiwan Semiconductor (TSM).

The week concludes with SunTrust Banks (STI), Regions Financial (RF), Citizens Financial Group (CFG), Schlumberger (SLB), Kansas City Southern (KSU) and Fastenal (FAST).

Equities extended their 2020 winning streak, with the Nasdaq increasing 1.74 percent. The S&P 500 Index returned 0.93 percent and the Dow Jones Industrial Average 0.66 percent.

Technology powered the market gains. SPDR Technology (XLK) rallied 2.18 percent. Software led among the subsectors as iShares Expanded Tech Software (IGV) climbed 3.22 percent. Healthcare was strong as well with SPDR Healthcare (XLV) rising 1.54 percent. SPDR S&P Biotechnology (XBI) advanced 1.61 percent.

The December employment report showed 145,000 net new jobs, slightly below expectations, but well within the norm of the current expansion. The unemployment rate held steady at 3.5 percent. Wage growth was lower than forecasted at 0.1 percent. Retailers added 41,000 new workers, healthcare 28,000, construction 20,000 and mining 8,000 new jobs.

Earlier in the week, both the Markit and ISM services PMIs showed the non-manufacturing sector accelerating. Both climbed from November and beat consensus forecasts.

iShares High Yield Corporate Bond (HYG) rose 0.17 percent, Invesco Senior Loan (BKLN) 0.04 percent and iShares Investment Grade Corporate Bond (LQD) 0.03 percent.

SPDR Energy (XLE) pulled back 0.99 percent after tensions in the Middle East eased. The U.S. tightened sanctions, though de-escalated military tensions. Crude oil fell more than 6 percent on the week, to $59 per barrel.

iShares MSCI Emerging Markets (EEM) gained 1.47 percent this week and iShares MSCI EAFE (EFA) 0.26 percent. The U.S. Dollar Index advanced 0.56 percent on strong economic data and falling Mideast tension.

China and the U.S. are set to sign their phase-one trade agreement next week.

Earnings season kicks into high gear next week. This week saw solid results from Constellation Brands (STZ), KB Home (KBH), PriceSmart (PSMT), Lennar (LEN), RPM International (RPM) and Jeffries Financial Group (JEF), all of which beat estimates.