Equity markets were mostly pensive today, the final trading day before President Donald Trump and his Chinese counterpart, President Xi Jinging, are set to meet at the G-20 summit in Japan. Had that get-together been held on Thursday, we’d likely be discussing much more action today, so hold on tight for Monday.
In the final trading day of June and the second quarter, the Nasdaq Composite and the S&P 500 gained 0.48% and 0.58% while the Dow Jones Industrial Average rose 0.28%.
One sector that looked good today was financial services, a group that has four residents in the Dow. Three of the Dow’s financial services names closed higher today with American Express (NYSE:AXP) being the exception and that is not a knock on the credit card giant.
Results of the Federal Reserve’s Comprehensive Capital Analysis and Review, or CCAR, were revealed today and the news was very good for major U.S. banks. More on this later.
With Monday representing the start of July, there are some decent news bits to consider. Historically, July is not the best nor is it the worst month in which to own stocks, but over the past decade, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA), the Dow-tracking exchange-traded fund (ETF), is one of the best-performing ETFs in the seventh month of the year.
Before we start the weekend, let’s look at some individual Dow stocks and how they fared on Friday.
JPMorgan Chase (JPM)
JPMorgan Chase (NYSE:JPM), the largest domestic bank, tussled with rival Goldman Sachs (NYSE:GS) for top honors among Dow Jones percentage gainers today and the aforementioned CCAR results were the reason why.
JPM investors are about to see a higher dividend and significantly larger buyback effort than was previously expected, thanks to the bank’s impressive CCAR results.
“Highlights among the big banks included a plan by JPMorgan to buy back as much as $29.4 billion of stock, far more than the roughly $21 billion investors expected,” reports Barron’s. “The country’s top bank by market value plans to boost its quarterly payout to 90 cents to 80 cents, resulting in a yield of 3.2%.The increase was in line with expectations.”
All things considered, it was a decent day for shares of Nike (NYSE:NKE). The stock was up 0.35% after the athletic footwear king report fiscal fourth-quarter earnings of 62 cents a share, below the consensus estimate of 66 cents. That represents a rare earnings miss for Nike. To be precise, it was the first time in seven years that NKE stock missed estimates.
Analysts and Nike executives alike are not sound alarming bells over the miss.
“Our distinctive innovation and digital advantage led to accelerated growth across our complete portfolio, while our brand fueled deeper relationships with consumers around the globe,” CEO Mark Parker said in a written statement.
In the healthcare sector, investors have their pick of Dow offenders today as most of the Dow healthcare stocks closed lower. On a percentage basis, one of the worst offenders was UnitedHealth (NYSE:UNH). Guess why?
There was another debate last night for Democratic presidential hopefuls and there was more talk in this round than in Wednesday’s debate about government-backed healthcare efforts many investors see as punitive to the sector.
Good news: healthcare is often one of the best-performing sectors in July.
In today’s example of somewhat silliness, Apple (NASDAQ:AAPL) lost 1.14% on news that designer Jonathan Ive is leaving the company to start his own firm, but even Apple CEO Tim Cook said the company will continue working closely with Ive and his new company. One analyst called Ive “irreplaceable.”
Chances are someone once said that about Steve Jobs. Said another way, no one is “irreplaceable” in Corporate America. Apple has been down this road before and dealt with it with aplomb.
Bottom Line on the Dow Jones Today
This was the best June for the Dow since 1938, with 28 of the index’s 30 members gaining in the final month of the second quarter. Looking forward to next week, there are likely to be some G-20 reverberations on Monday, but remember it is a holiday-shortened week. With the Fourth of July coming on a Thursday, don’t expect much in the way of excitement after Tuesday.
Todd Shriber does not own any of the aforementioned securities.
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