Wall Street slides on renewed U.S.-China trade fears

After over 350 points in gains over the last five sessions, the Dow took a 220 point plunge today after the White House threw cold water on the high hopes for a China trade agreement, after sending positive signals all week.  (Early in the session, it was even worse, the Dow being down nearly 400 points at noon before starting a long afternoon recovery.)  Also dampening market enthusiasm was the EU slashing growth forecasts for both 2019 and 2020 in its largest countries, resparking global growth fears.  All the stocks dependent on China took a big hit, especially semiconductors, and as is usually the case on troubling days, everyone took refuge in the defensive sectors, namely utilities and real estate.  Q4 reporting today was also disappointing, especially from Twitter.  So far, more than half of the S&P has reported with 71 percent beating estimates.  So Q4 continues to go well but Q1 is suddenly looming as barely break-even, the new forecast now shrunk to 0.1% earnings growth compared to a 5.3 percent projection last month.  For the first time in a while, volume was above the 4-week average at 7.89 billion.  At least today, investors are off the fence and a little more nervous. 

Wall Street rally pauses after underwhelming revenue forecasts

As today’s expert states, today there was “a void of catalysts for market gains.” So after two days of 3-digit gains, today investors took a breath with the Dow dipping a hundred points early on but then regaining all but 21, triggered mainly by videogame makers turning in poor Q4 reports.  The indexes remain near two-month highs but with trade talks still being very much in the lurch, many prefer the sidelines evidenced by the lower than usual volume of 6.7 billion.  The one bright spot was the semiconductor index which advanced 2.6 percent with residual optimism about China, now the main intrigue for the market.  The Fed chair was due to speak at 7 p.m. Wednesday so Thursday’s opening will undoubtedly reflect the reaction to that though, in all likelihood, Powell will simply have said, “stay the course.” 

Earnings send Wall St higher as investors eye State of the Union speech

Yesterday the market was up 175 and continuing on the same good feelings, today it was another 172.  More upbeat Q4 remains the primary driver with Estee Lauder and Ralph Lauren being the big winners.  Alphabet didn’t do too badly either.  There is optimism about reaching a deal with China and “the wall” issue, about which Wall Street could care less, will not cause another shutdown.  But mostly, after a terrible end to ’18, investors are thrilled that so far ’19 has gotten off to such a great start, the S&P and Dow both up 9 percent, the Nasdaq 11 percent.  Volume remains a little below average at 6.9 billion. 

Boost in tech shares sends Wall Street higher

There was no volatility in the market today. Indeed it was a straight up trajectory of 175 points triggered by sustained optimism over China that boosted the entire tech sector, with Apple and Microsoft rising 2.7 percent and the whole of the S&P tech gaining 1.6 percent.  Having dropped last year 20 percent from its September high, the S&P has now rebounded all but 8 percent.  Q4 continues going well with 71 percent of reporting companies beating estimates.  The projection for Q4 earnings growth has now risen to 15.4 percent and the forecast for Q1 is now just 0.5 percent.  Volume was below average at just over 6.5 billion. 

Succinct Summation of Week’s Events 1.1.19 (plus The Greatest Retirement Fear)

Below is the weekly summation, the positive being the Fed doing exactly what the market wants it to be doing and payrolls rising dramatically. The negative is that unemployment has risen .1% to 4.0%, but this isn't really a negative since it mainly means that workers who have long since dropped out are seeing enough optimism in the job market to get back in the swim.  And the big negative -- the next shutdown is in just two weeks.  The bonus this Sunday night is a link to the most recent episode of the PBS series WealthTrack, this week focused on the topic of The Greatest Retirement Fear. If you guess that the greatest retirement fear is running out of money, you would be correct.  Consuelo Mack's guests discuss this fear across all age categories.  Hope everyone enjoyed this nice warm weekend after that historically cold week we just had. 

AAII Different Than a Mutual Fund

Your weekend reading selection this evening is an article from Thursday's edition of the AAII newsletter suggesting a different way to invest in value stocks.  The link has the graphics.  Enjoy the wildly different weekend we're having versus last week. 

Amazon jitters offset upbeat jobs data on Wall Street

304,000 new jobs, nearly double what was expected, were created in January and thus pushed the Dow up nearly 200 points in the a.m. session.  Unemployment also rose to 4 percent but this was mainly due to the job market improving so much that those who had long since dropped out were now back in wanting to go back to work.  This 6-digit job increase went along with a report of increased manufacturing activity pointing to continued underlying strength in the economy.  But then things started going south when Amazon disappointed and this sent the heavyweight down and the entire retail sector with it.  At close, the Dow had lost all but 64 points of the gains.  China also reported that its manufacturing shrank for the second consecutive month.  Volume continued heavy at 7.5 billion.