S&P 500; US Indexes Fundamental Daily Forecast – Earnings Driven Rally Likely to Continue
The major U.S. stock indexes continued to trend higher on Tuesday with the NASDAQ Composite leading the way. The tech-weighted index closed at a record high, driven by shares of Netflix which surged on stronger-than-expected subscriber growth.
In the cash market, the NASDAQ Composite settled at 7462.99, up 54.96 or +0.74%.
Netflix, the video streaming giant announced after the close on Monday that total net subscriber adds reached 8.33 million, beating a StreetAccount estimate of 6.39 million. Netflix’s stock surged 10 percent, lifting the company’s market cap above $100 billion for the first time.
The benchmark S&P 500 Index also finished at an all-time high. In the cash market, the index settled at 2839.13, up 6.16 or +0.22%.
The S&P 500 Index was helped by a surge in shares of Whirlpool. Its stock jumped 3.2 percent after President Trump approved a 20 percent tariff on the first 1.2 million imported large residential washing machines in the first year and a 50 percent tariff on machines above that number.
The blue chip Dow Jones Industrial Average also reached an intraday record, however, it was unable to sustain the gains and turned lower for the session.
In the cash market, the Dow settled at 26210.81, down 3.79 or -0.01%.
The selling pressure was generated by mixed earnings reports from several Dow components. Johnson & Johnson, Procter & Gamble and Travelers Cos. all reported better-than-expected earnings and revenue on Tuesday. Verizon, another Dow component, posted a profit that missed expectations, while sales surpassed analyst estimates.
Forecast
The major U.S. stock indexes are in the midst of an earnings driven bull market and I see nothing that can derail the 18 month rally. Although it’s only been a little more than a week, quarterly earnings have been very positive this earnings season.
As of Tuesday, 76 percent of the S&P 500 companies that had reported surpassed earnings expectations, while 84 percent of those companies had beaten sales estimates, according to Thomson Reuters I/B/E/S.
The three major indexes are up at least 6 percent in January and I expect to see another strong performance on Wednesday.
This article was originally posted on FX Empire
