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Stock Market News for Jun 24, 2020

Zacks Equity Research

Wall Street maintained its two-day winning streak following the Trump administration's confirmation that the Phase1 trade deal between the United States and China is alive. Moreover, a series of U.S. and Eurozone economic data bolstered market participants' sentiments. All three major stock indexes finished in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.5% or 131.14 points to close at 26,156.10. Notably, 15 components of the 30-stock blue-chip index ended in the green while 15 closed in red. The S&P 500 advanced 0.4% to end at 3,131.29. The Consumer Discretionary Select Sector SPDR (XLY) rose0.8% while the Utilities Select Sector SPDR (XLU) tumbled 1%. Notably, eight out of eleven sectors of the benchmark index closed in positive territory while three finished in red.

Meanwhile, the tech-heavy Nasdaq Composite ended at 10,131.37, increasing 0.7%. The tech-laden index recorded its all time high closing as well as all time intraday high at 10,221.85. This was Nasdaq Composite's third closing above 10,000 and 21st record close this year. The index posted its eight straight winning streak, reflecting its longest win streak since Dec 26, 2019.

Apple Inc. AAPL gained 2.1% to close at $366.53. The stock posted its all time high of $372.38 during intraday trading. Apple carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was down 1.3% to 31.37. A total of 12.07 billion shares were traded on Tuesday, lower than the last 20-session average of 13.29 billion. Advancers outnumbered decliners on the NYSE by a 1.53-to-1 ratio. On Nasdaq, a 1.22-to-1 ratio favored advancing issues.

U.S.-China Trade Deal Alive

On Jun 22, after the closing bell, confusion investors were rattled by a news that the White House trade adviser Peter Navarro said the U.S.-China Phase1 trade deal is over. later he clarified saying “My comments have been taken wildly out of context.” “They had nothing at all to do with the Phase I trade deal, which continues in place.” President Donald Trump also confirmed that the interim trade deal with China is very much in progress.

On Jan 15, President Donald Trump and Chinese vice premier Liu He signed an interim trade deal. Per the deal, China has agreed to purchase $200 billion in U.S. goods over the next two years in addition to the total amount of China’s imports from the United States in 2017. Notably, the Asian economic super power procured $186 billion of U.S. goods and services in 2017.

Economic Data

The U.S. government reported that new home sales jumped 16.6% in May to a seasonally-adjusted annual rate of 676,000 units compared with downwardly-revised pace of 580,000 units in April. The consensus estimate was for 630,000 units. This reflects the biggest jump of the metric in the month of May of any year since 2007. Year over year, new home sales climbed 12.7% in May.

IHS Markit reported that its preliminary composite purchasing managers' index for the U.S. economy increased to 46.8 in June from 37 in May. The services sector index grew to 46.7 in June from 36.9 in May while the manufacturing index rose to 49.6 in June from 39.8 in May. Notably, any reading below indicates contraction of economic activities. However, the data shows that both manufacturing and services industries of the U.S. economy are recovering strongly.

IHS Markit reported that its preliminary composite purchasing managers' index for the Eurozone increased to 47.5 in June from 31.9 in May. The services sector index rose to 47.3 in June from 30.5 in May while the manufacturing index rose to 46.9 in June from 39.4 in May. All three data marked their four-month highs.

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