Stocks Finish Higher on Headline News

Stocks Finish Higher on Headline News

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

Stocks jumped at the open on initial speculation that a deal to reopen the government was imminent, the notion that the Fed may be getting close to the end of its balance sheet normalization effort, plus the expression from Treasury Secretary Mnuchin that the US is making progress with China trade talks.

Then, the headline news hit in the afternoon session that an agreement had been struck to provide funding, minus border security funding, to re-open the government through 15 February.

Senate Majority Leader Mitch McConnell (R:KY) praised the deal that will end the government shutdown but cautioned that Democrats need to hold up their end of the bargain.

“I was glad to see today the president’s announcement that he and our Democratic colleagues have reached an agreement that will immediately reopen the government while providing the room to negotiate a funding bill for the Department of Homeland Security,” McConnell said on the Senate floor shortly after Trump announced that a deal had been struck.

US Senate Minority Leader Chuck Schumer (D:NY) gave credit to President Trump, Senate Majority Leader Mitch McConnell, and federal workers as the government shutdown comes to an end.

“I want to thank President Trump and Leader McConnell. As just outlined, we have agreed to pass a clean, three-week continuing resolution to reopen the government.

“As soon as the president signs the legislation to open government, we in Congress will roll up our sleeves. I genuinely hope that this process can produce something that is good for the country and acceptable to both sides,” he said.

The DJIA(+0.8%) and the NAS Comp (+1.3%) posted weekly gainers of 0.1% each, and the Russell 2000 (+1.3%) returned to Unchanged.

9 of the 11 S&P 500 sectors finished the day in Green with the cyclical materials (+1.9%), information technology (+1.5%), and industrial (+1.3%) groups setting the pace.

Conversely, the utilities (-1.3%) and consumer staples (-0.2%) sectors were the finished in the Red.

The President agrees to re-open the government through 15 February, and negotiations over border security funding will take place in the interim, and a failure to reach a compromise on that front could result in another shutdown or a declaration of a national emergency in order to secure the Wall funding.

The market’s response to the news was muted, partially because it had already priced in some type of an agreement, and partially because it realizes it is only a temporary solution.

US Treasuries

Yield Check: 2-yr +4 bpts at 2.60% 3-yr +4 bpts at 2.57% 5-yr+4 bpts at 2.59% 10-yr+4 bpts at 2.75% 30-yr+3 bpts at 3.06%

Currencies

.DXY fell 0.9% to 95.75, pulled back by a rebound in the EUR.

$EURUSD +0.9% at 1.1410 $GBPUSD+1.0% at 1.3197 $USDCNH -0.6% to 6.7533 $USDJPY Unch at 109.65

Commodities

WTI Crude Oil +0.9% at 53.62 bbl $USO Gold +1.4% at 1297.80 oz $GLD Copper +3.4% at 2.73 lb $CU

Friday, the major US stock market indexes finished at: DJIA +183.96 at 24737.20, NAS Comp +91.40 at 7164.37, S&P 500 +22.43 at 2664.72

Volume: Trade on the NYSE came in at 864-M/shares exchanged

  • Russell 2000 +10.0% YTD
  • NAS Comp +8.0% YTD
  • S&P 500 +6.3% YTD
  • DJIA +6.0% YTD

Heffx-LTN’s overall all technical analysis of the major US stock market indexes are Neutral to Bearish for the week ending 25 January 2019

Have a terrific weekend

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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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