Good News and Earnings are Driving This Market

Good News and Earnings are Driving This Market

$DIA, $SPY, $QQQ, $RUTX, $VXX

FLASH: Wall Street Liked the Trade News and Earnings Reports

Moving this Market

S&P 500 closes above 3000, boosted by encouraging trade news and positive earnings, guidance from widely-held companies

High-level trade talks will reportedly continue in China next week from Monday to Wednesday

10 of 11 S&P 500 sectors finish higher, led by the trade-sensitive materials and industrials sectors

Congress reached agreement to increase budget deficit and suspend debt ceiling for 2 years

Talks between China and the US would start Monday as US negotiators headed to China. The US delegation will be led by Trade Representative Robert Lighthizer and will be in China through Wednesday of next week.

The world’s 2 largest economies have been locked in a trade war that has seen 25% tariffs imposed by President Trump on $200-B of Chinese products. China has retaliated with their own tariffs prompting fears of a global economic slowdown.

The announcement of the deal between Congress and the White House to suspend the debt ceiling for the next 2 years is undiluted good news.

With an agreement that the government can borrow to spend the money that it has already committed to spending, we can avoid a totally unnecessary, politically driven crisis that could have caused real economic damage.

Better-than-expected earnings from DJIA components, Coca-Cola KO, +6.07%   and United Technologies UTX, +1.50%   reported before the market opened also helped stocks rise for a 2nd day running.

More than 18% of S&P 500 companies have posted Quarterly numbers this earnings season.

Of those companies more than 78% have reported better-than-expected profits, according to FactSet data. Those companies have also seen their earnings grow by an aggregate of 3.6%.

Wall Street also expects the Fed to lower interest rates by at least 25 bpts when it meets at the end of July, and economists expect the European Central Bank to cut rates at its meeting Thursday.

The International Monetary Fund said in its World Economic Outlook report that the global economy is expected to expand by 3.2% in Y 2019, down 0.1 percentage points from its April forecast and 0.3 percentage points below the estimate at the start of the year.

The IMF cited concerns about the ongoing US-China trade dispute and noted that “global technology supply chains were threatened by the prospect of US sanctions, BREXIT-related uncertainty continued, and rising geopolitical tensions roiled energy prices.”

Tuesday, the major US stock market indexes finished at: DJIA +177.29 at 27349.19, NAS Comp +47.27 at 8251.41, S&P 500 +20.44 at 3005.47

Volume: Trade in the NYSE came in at 703-M/shares exchanged

  • NAS Comp +24.4% YTD
  • S&P 500 +19.9% YTD
  • DJIA +17.2% YTD
  • Russell 2000 +15.3% YTD

HeffX-LTN’s overall technical out look for the major US stock market indexes if Bullish to Very Bullish in here.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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