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Dow Jones Today: Trade Influenced Stocks More Than Impeachment News

Todd Shriber

Stocks moved modestly on a day in which Democratic leadership in the House confirmed articles of impeachment will be filed against President Trump, indicating the trade relationship with China is a bigger priority for markets than party politics.

  • The S&P 500 rose 0.15%
  • The Dow Jones Industrial Average climbed 0.10% today
  • The Nasdaq Composite advanced 0.05%
  • Supported by positive analyst chatter, Nike (NYSE:NKE) was the Dow leader today, jumping 2.21%.

Talk that President Trump could back off tariffs on Chinese imports set to go into effect on Dec. 15 along with reports that officials from both sides remain engaged in talks lifted stocks today.

“Chinese officials are in ‘close contact‘ with their American counterparts on negotiations, said Ministry of Commerce spokesman Gao Feng,” reports Bloomberg.

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Still, not all of the China-related headlines out Thursday were perfect. For example, Treasury Secretary Steven Mnuchin said earlier today he supports China being removed from a World Bank program designed to help smaller, less affluent nations refinance debt.

“Mnuchin added that the selection of former Treasury Undersecretary David Malpass as the World Bank’s president earlier this year gives him confidence the institution will revise its practices to make its lending more equitable.” according to CNBC.

Those comments may have capped stocks’ gains today as just 14 of the Dow’s 30 members were higher in late trading.

Nike Runs Higher On Goldman Upgrade

As noted above, Nike was the best-performing name in the Dow today and an upgrade from Goldman Sachs explains why the stock surged. Nike entered Thursday with a year-to-date gain of 26%, putting it ahead of the S&P 500 and well ahead of the Dow. Goldman Sachs analyst Alexandra Walvis believes the good times can continue next year.

She upgraded Nike to “buy” from “neutral” while adding the stock to Goldman’s prestigious conviction buy list.

“Evidence of building pricing power, signs of operating leverage, accelerating shift to differentiated retail, sharply scaling app ecosystem, and a constructive global athletic growth backdrop,” said Walvis in a note to clients.

The analyst has a $112 price target on Nike, implying upside of about 20%.

Happy Holidays With Apple

Apple (NASDAQ:AAPL) is classified as a technology stock, but it’s very much levered to strength in the consumer sector, making it a credible play on the holiday shopping theme. Wall Streets seems to agree with that sentiment.

Today, Citigroup analyst Jim Suva reiterated a “buy” rating on Apple, noting that the holiday season offers plenty of catalysts for the stock.

“This Christmas is different for Apple,” said the Citigroup analyst. “Apple’s product offerings as well as pricing strategies and recent demand trends augur for a better Christmas quarter compared with last [fiscal] year when Apple negatively preannounced.”


Good News For This Sector

The healthcare sector, the second-largest group in the S&P 500 behind technology and an important part of the Dow as well, has been getting plenty of attention thanks to a recent resurgence. Dow component UnitedHealth (NYSE:UNH) has been leading that climb and that stock, along with fellow Dow member Johnson & Johnson (NYSE:JNJ) traded higher today.

In other words, it was a mixed bag for Dow healthcare stocks on Thursday with Pfizer (NYSE:PFE) trading lower. But don’t fret. Healthcare is looking healthy and could be a rewarding defensive play in 2020.

“I believe that it’s broken out so strongly that even after … it works off that overbought condition, it’s going to rally higher … if we do have a big scare on the tariff side. But it also should rally even if the whole market moves up. So it’s kind of a win-win situation, again, after a little bit of a breather on the near term,” said Matt Maley, chief market strategist at Miller Tabak, of the healthcare sector in a CNBC interview.

Bottom Line

Two days in a row of good/no bad news on the trade front is encouraging, but near-term bullishness will be tested tomorrow when the Labor Department delivers the November jobs report before the bell. The ADP private payroll survey out earlier this week was weaker-than-expected, indicating the same could be true of the more Labor Department number.

Economists are expecting the addition of 185,000 new jobs last month. If the number comes in well below that level and the October and September numbers are revised lower, Friday could be a rough day for riskier assets.

As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities.

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