S&P 500's best month since 2015 ends on a high note

The market opened 175 points in the red and struggled all day long to get back to even, the Dow closing 15 points down.  Today’s reporting does not make clear what caused the big crash in the a.m. but does attribute the comeback to a number of major companies beating Q4 estimates.  These would include Facebook, GE, and Charter.  Despite the day ending even, it is the strongest monthly performance for the S&P since 2015 and the strongest January since 1987.  42 percent of the S&P has now reported with 71 percent beating estimates.  Investors are now waiting for the conclusion of the China talks that began Wednesday and hoping for an end to the trade war.  Volume was considerably above average at 9.5 billion. 

Big thumbs-up from Wall Street after Fed signals patience on rates

Yesterday the prediction was for a jump Wednesday morning due to Apple’s after-close positive Q4 report suggesting that the China situation may not be as dire as thought.  That’s exactly what happened this morning with the Dow jolting up 250 points right out the gate.  Then it just kept going all day long with the Fed telling investors exactly what they wanted to hear – no rate hike this month and possibly not for quite a long while.  Apple jumped nearly 7 percent and our other China-sensitive stock – Boeing – jumped over 6 percent.  The latest China talks started Wednesday and Facebook and Microsoft, reporting after the close, rose in expectations of good news.  About one-third of the S&P has now reported with 73 percent topping forecasts.  Put it all together and the Dow closed 434 points up.  Volume was a little above average at 7.9 billion. 

Wall Street wavers as tech gives ground and industrials rebound

There was quite a lot of volatility again today with the Dow swinging back and forth in a 170 point range triggered by mixed reactions between tech dipping and industrials rebounding. There wasn’t a lot of news today that anyone could hang their hat on so it became a day of indecision with the Dow up as much as 150 a couple of times during the session but finally closing up 51 points.  But the big trigger was Apple rebounding with a positive Q4 report following its dire warning earlier this month that its sales were flagging due to China.  Now their latest results suggest that business with China may not be so soft after all and that caused a surge in extended trading suggesting there could be a jump on Wednesday morning.  Volume remains below average at 6.9 billion. 

Caterpillar and Nvidia warnings send Wall Street tumbling

The Chinese slowdown took center stage again when Caterpillar and Nvidia reported big profit losses due to softening demand from China, a warning that brought the Dow down 208 points and sent the overall tech sector down.  There are still hopes that a deal can be reached at trade talks later this week and also hopes that Q4 will continue to beat Wall Street expectations.  So far 72 percent of reporting companies have beaten estimates.  The good news is that Q4 earnings growth is still pegged at 14 percent; the bad is that 2019 earnings growth has fallen to under 6 percent.  Volume was just a little below average at 7.3 billion. 

Succinct Summation of Week’s Events 1.25.19 (plus GDP 2008-19)

Below is the weekly summation, the big positive being the end of the government shutdown - for 3 weeks anyway, the big negative being all the grounded flights due to lack of air traffic controllers on account of the government shutdown.  The bonus this Sunday is a graphic showing the 11 year history of U.S. GDP from the beginning of the Great Recession to present.  The lingering question is:  does this chart suggest we're about to have another crash?  (I would suggest the chart says not.  Look at all the times since 2009 that GDP has been lower than it is now, and there's been no crash.)  We're about to enter a week of record-breaking cold, so bundle up and stay warm.  Better yet, don't bundle up and just stay inside!  Hope you all had a great weekend.

Jack Bogle Part III: "Enhanced" Index Funds

Your weekend reading for this very frigid Saturday is yet another tribute to the recently late Jack Bogle courtesy of an article a few days ago in the AAII blog, "Enhance" Index Funds. For those of you who like ETFs, this should have some valuable tips in it.  Stay warm!

Wall Street advances on Washington temporary shutdown deal

Today’s announcement from Trump that he has accepted the compromise to reopen the government was greeted with cheers as the Dow zoomed up over 300 points in the morning.  But then came mixed Q4 reports with companies like Starbucks and Colgate-Palmolive beating forecasts but then companies like Intel and DR Horton disappointing.  So the Dow went into slide mode all afternoon to finally close up 183.  There was also the sentiment dampening worries from the World Economic Forum where global business leaders expressed that they are “fed up” with Trump’s policies.  But the real damper was the reality check that, despite the deal to end the shutdown, it was only temporary with a very real likelihood that we’ll be starting all over again in three weeks.  So uncertainty still dominates and, despite the fact that the Dow and Nasdaq have enjoyed five straight weekly gains (and the S&P four until this week), it’s not enough to relieve the jitters.  At just over 7.5 billion, volume is getting closer to the 4-week average of just under 7.8 billion.