U.S. stocks edge downward as Wall Street takes a pause

There’s been a consistent theme in this week’s trading – retrenchment.  Investors have concluded that the market has handled all the trade optimism it can and, with new concerns about a pullback for Q1, there’s been a slow retreat while the market awaits better news.  Thus the Dow today spent the entire session in the red again with statements from Larry Kudlow leaving everyone flat whereas, a couple weeks, such a statement would have triggered a rally.  And though the good news that Q4 pushed GDP up 2.9 percent (just barely missing the 3 percent target) helped some, it wasn’t enough to close the index up.  Volume was above average at 8.2 billion. 

Wall Street steadies after Lighthizer, Powell, Cohen testimonies

The entire day was in the red starting right out the gate down almost 200 points before the market decided that Michael Cohen’s testimony was not producing any major bombshells.  I guess the market really is about perception since, depending on which side of the aisle you’re on, the day’s hearing was either the first step towards impeachment – or a complete Trump victory!  But the sentiment continues that all the good news regarding trade and rate hikes is already priced in so investors are now waiting for better news before taking more action.  But after the morning crunch, the Dow rose steadily to close 72 down and, at 7.3 billion shares traded, just about even with the 4-week average. 

Wall St. edges lower in choppy session

The Dow was in the red all day until the last hour or so when it briefly gained about 60 points but then just as quickly lost it all in the final minutes to close down 33 points.  Just as happened yesterday, investors were leery of continuing to chase trade optimism so took a pause in lieu of better news, which was not forthcoming today.  This was despite the fact the Powell declared a continuation of the “patience” policy but weak housing data plus some nerves over Cohen’s impending testimony overshadowed the good news, even the good news that consumer confidence was up.  Volume again dipped just a little below the 4-week average at 7 billion. 

Wall Street rises after Trump stirs China trade hopes again

It was almost another 3-digit day with the Dow up over 200 points before noon on continued trade optimism but then the market reversed course on the premise that the rally had topped out and that good trade news had already been priced in.  So it was steady decline all afternoon to end 60 points up.  But another rally may be coming tomorrow if Fed Chair Powell continues to endorse the “patience” policy on rate hikes, something of which investors are currently not sure.  The forecast for Q1 earnings also took another dip today down now to a 0.9 percent decline vs 0.6 last week.  This forecast contrasts with the one from early January where Q1 growth was expected to increase by 5.3 percent.  After a number of days of below-average volumes, Monday’s trades were very close to the 4-week average at just under 7.4 billion. 

Succinct Summation of Week’s Events. 2.22.18 (plus The Bulls vs The Bears)

Below is the usual weekly summation with all the indexes up and the S&P just 5% off its all-time high.  The big negatives continue to be all the political dysfunction for which there does not appear to be any end in sight.  The bonus this Sunday is an article from our friends at Heritage Capital Research published a couple weeks ago that does a pretty good job delineating the whole debate of whether it's the bulls or the bears who are winning (or may ultimately win) in this rather chaotic environment.  As always, the link provided will give access to some useful graphics that support the story.  Hope everyone survived the high winds today and that none of you are currently in the dark without power. 

Wall Street Journal: History Bodes Well For Stocks the Remainder of the Year

For your weekend reading, I submit the following commentary from Friday's Wall Street Journal showing how historical trends since 1931 demonstrate that the stock market will continue to do well for the rest of this year.  With 50 mph winds in the forecast for tomorrow, let's hope we don't lose power.  If we do, there won't be any postings.  So if you miss this tomorrow or Monday, you'll know why. 

S&P 500 posts highest close since November 8 on trade optimism

The 3-digit loss from yesterday’s session was more than made up for by a bigger 3-digit gain in today’s.  Continuing to cling to hope on the China question, investors shot the Dow up a rather respectable 181 points.  But March 1^st, whether it be a real deadline or a loose one per Trump, it is the date that the market will expect some tangible progress and if it isn’t forthcoming there will be a reaction to the downside.  So the end of next week will be more telling.  The S&P is now up 19 percent from the December low.  It’s been a good week with all three indexes gaining and nine weeks of gains for both the Dow and Nasdaq.  The sticking point right now is that, despite all the optimism on ending the trade war, the concern is that, with Trump, things have a tendency to suddenly change at the last minute.  So ending the trade war and stabilizing the Chinese economy is now seen as key to future market results.  At 6.9 billion, volume remains below the 4-week average.