|Day's Range||3,156.51 - 3,182.68|
|52 Week Range||2,346.58 - 3,182.68|
Fed Chairman Jerome Powell described the U.S. labor market as "strong" but not "tight," admitting that the labor market is not as close to maximum employment as it once thought.
With the end of the year and the decade fast-approaching, Wall Street strategists have begun to deliver their expectations about where the stock market will close out 2020.
STREETWISE BARRONS The secret to investing is to buy low, sell high, they say. Or is it to buy (LOW) sell (KHC)? I can never keep those two straight. One seems oddly specific for what is supposed to be timeless advice.
All three major stock indexes closed with minor gains on Friday after Thursday’s rally. A “phase one” trade deal between the U.S. and China has finally arrived. The U.K., after the election, will likely leave the European Union.
“It was unfortunate,” Richard Galanti, Costco’s executive vice president and chief financial officer, said during a conference call with shareholders Thursday.
President Donald Trump announces a phase-one trade deal with China on Friday, saying Beijing had agreed to purchases of U.S. goods and will avoid tariffs that had been set to go into place on Sunday.
U.S. stocks closed slightly higher Friday after President Donald Trump and Chinese officials announced a trade pact that includes a rollback of some tariffs, the scrapping of further duties originally set for Sunday, and promises of targeted U.S. agricultural purchases by China.
(Bloomberg) -- In 2011 and 2012, it was Europe’s credit crisis. Three years later, a currency devaluation in China twice sent the S&P 500 into corrections. Last Christmas, the bull market came within points of dying as the Federal Reserve raised interest rates.Notice a pattern? Some pundits do, one in which every three years or so something drags the bull market to the brink of extinction, before a last-minute escape. Goofy numerology aside, it’s a record of resilience that underpins a case for optimism. And right around now is when the benefits start to be felt. The S&P 500 just rose for the ninth week in the past 10.Never mind anemic profit growth, or the threat of a full-blown global trade war. Against the gloomy backdrop is a market whose gain is rivaling some of the best years in decades. Complacency? Perhaps. To bulls, it’s the market celebrating its survival from a trade-fomented growth attack, and in some ways, predicting a rebound ahead after the Fed has taken a U-turn to cut rates.“The market turmoil and economic slowdown over the past 18 months is not marking the end of the business cycle, but rather represents a reset similar to crises that occurred every three years after 2008,” said Marko Kolanovic, a strategist at JPMorgan Chase & Co. “As the monetary stimulus acts with a lag, we believe that a cyclical upswing will more decisively manifest itself.”As nerve-racking as these crises have been, so far they’ve provided support for the adage that what doesn’t kill the bull market makes it stronger. A couple down years and six corrections later, the advance stands as the longest in history as it heads to the end of its 11th year.Theories exist as to why this cycle has been so long. Some credit the Fed, which has repeatedly stepped in to help restore market order. During the 2011-2012 European debt crisis, the central bank started two rounds of quantitative easing to spur growth. Three years later, equities sold off as it began to raise rates and it halted hikes for a year.A similar dynamic played out in December 2018, when a fourth rate increase of the year sparked a near-death experience for the bull run. The Fed did an about-face midyear and equities are on track for one of the best annual gains in two decades.“We have mediocre earnings growth. Yet the Fed cut three times this year,” said Michael Mullaney, director of global market research at Boston Partners, which oversees $87 billion. “As long as you have that kind of wind on your back, there is no reason that the economic backdrop can’t continue to be supportive for stock prices.”Others attribute the market resilience to some mini-cycle slowdowns that ended up emboldening bulls. With U.S. gross domestic product stuck in the weakest recovery since World War II, it often feels like the world is on the edge of collapsing. But while growth has been slow, it’s been unusually steady. So much so that declines in corporate profits have been shallow.What’s more, whatever ills that have hit the market have paled in comparison to the horrific experience in 2008.Not everyone is convinced the market is out of the woods. At UBS Group AG, the firm’s model suggests the S&P 500’s expected rate of profit growth over the next 12 months is likely to turn negative in February, followed by deterioration in some leading indicators for manufacturing through the second quarter of 2020. Historically, such a pattern has been associated with market declines that ran at an annualized rate of more than 20%, warned Francois Trahan, a strategist at the bank.For now, bulls remain in charge. Stocks rose this week as the Fed kept interest rates unchanged and President Donald Trump signed off on a phase-one trade deal with China. Up in all but two months this year, the S&P 500 has returned almost 30% including reinvested dividends.Optimism has gathered pace in the past three months, with investors dumping defensive shares in favor of those that benefit from a pickup in the economy. Small-cap stocks have broken out of a one-year trading range while semiconductor shares defied a profit slump to lead the market. Financial companies this week saw their stocks eclipsing the 2007 peak for the first time, making a full recovery from the global financial crisis.While periodic turmoil and recoveries have helped prolong the expansion, the unprecedented nature is sure to make investors nervous about an end to the cycle, according to Lauren Goodwin, an economist and multi-asset portfolio strategist at New York Life Investment Management.“Even if you have mini cycles, you still have the macro cycle happening,” Goodwin said in an interview at Bloomberg’s New York headquarters. “It doesn’t mean it couldn’t last another couple of years but we’ve never seen it before. And so you see people taking both sides of the coin.”\--With assistance from Vildana Hajric and Sarah Ponczek.To contact the reporter on this story: Lu Wang in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The S&P 500 and the Nasdaq Composite finished the week at records Friday but enthusiasm over an announced China-U.S. partial trade deal, which had sparked buying Thursday, faded as investors weighed aspects of the so-called phase-one pact. The Dow Jones Industrial Average closed up about 0.01% at 28,135, missing a record close at 28,164, while the S&P 500 index advanced less than 0.01% to 3,169, enough for a fresh all time high. The Nasdaq Composite Index closed up 0.2% to end at 8,735, marking its second straight all-time closing peak. For the week, the Dow gained 0.4%, the S&P 500 returned 0.7%, while the technology-laden Nasdaq gained 0.9% for the five-day period. Underpinning the week's advance was the easing of fears --at least temporarily--surrounding two of the biggest points of friction for stock-market investors: U.K. elections and trade tensions. The U.S. and China announced a limited agreement Friday to halt the trade war, eliminating tariffs that were set to go into effect Sunday; but some critics worry that the phase-one deal may not accomplish as much to alleviate future trade tensions as had been expected--a point that some say doesn't entirely help business leaders make strategic plans. Meanwhile, a resounding election victory for Prime Minister Boris Johnson's Conservative Party raised hopes for a quick divorce from the European Union. In corporate news, shares of Live Nation Entertainment Inc tumbled after the Wall Street Journal reported that the Justice Department was preparing to take legal action against the company, alleging that it sought to strong-arm concert venues into using its dominant Ticketmaster subsidiary.
The new device is a thick-looking brick that promises to be a major step up from the Xbox One. It looks more like a PC tower than a console, and that’s great for its performance prospects.
Strategists see modest gains ahead for stocks in 2020, supported by a stable economy, accommodative monetary policy, and a pickup in manufacturing. Two wild cards: U.S.-China trade and the 2020 presidential election.
A vote on impeachment by the full House is widely expected to come before Christmas, putting the Republican-led Senate on track to try President Donald Trump in January.
Ucommune Group Holdings Ltd., China’s answer to WeWork, has filed for a U.S. initial public offering, apparently undaunted by the collapse of its U.S. rival’s effort to go public in September.
AT&T Inc. said Friday its board has agreed to increase its quarterly dividend by 2% to 52 cents a share. The new dividend is payable Feb. 3 to shareholders of record as of Jan. 10. The company said it has begun retiring shares after entering a $4 billion accelerated share repurchase program and plans to retire about $100 million worth in the first quarter of 2020. AT&T is also on track to hit its 2019 net debt-to-adjusted EBITDA ratio target in the 2.5 times range and expects its leverage ratio to range from 2.0 times to 2.25 times by the end of 2022. Shares were slightly lower Friday, but have gained 34% in 2019, while the S&P 500 has gained 26%.
Analyst Emmanuel Rosner isn’t recommending the stock, although he notes that demand is “solid” and that free cash flow can end the year strong.
Costco Wholesale Corp. shares slid 1.9% Friday, as analysts weighing in on the company's latest quarterly earnings said they were solid but not stellar. "We would say that COST delivered a strong quarter by most retailers' measures, but by Costco's standards was somewhat average," wrote Instinet analyst Michael Baker, who rates the stock as neutral. "While in no way a negative catalyst with the stock trading at ~34.5x FY20 consensus EPS, we think that the market would want more of a beat to get the stock appreciably higher from here, especially with a tougher profit comparison ahead in 2Q." JPMorgan said the stock remains a core long-term holding in its view, as it continues to capture market share from peers and other retailers, while its food business in the U.S. and internationally remains robust. "Moreover, we still see the high probability of a special dividend given COST ended 1Q with $9B in cash," analyst Christopher Horvers wrote in a note. Costco shares have gained 43% in 2019, while the S&P 500 has gained 26%.
Friday the 13th is supposed to be scary. It falls way short, at least in terms of the stock market. It turns out that stocks on Friday the 13th trade pretty much as they do on any other day on the calendar.
Choice Hotels International Inc. said Friday its board has approved a 5% increase in its quarterly cash dividend to 22.50 cents a share. The new dividend will be payable Jan. 16 to shareholders of record as of Jan. 2. Shares were not active premarket but have gained 41% in 2019, while the S&P 500 has gained 26%.
The S&P; 500 rallied slightly during the week, reaching towards all-time highs again. At this point, the market is very likely to see pullbacks as a buying opportunity, especially now that we have had the “phase 1 deal” agreed-upon by the Americans and the Chinese.
U.S. President Donald Trump's limited trade deal with China removes a major hurdle for Apple and other technology stocks that have already surged this year to record highs. China has agreed to boost imports of U.S. energy, pharmaceutical and agricultural products, although Chinese officials offered no details on the amount of U.S. goods Beijing had agreed to buy. If it is signed, Trump's long-awaited deal will be a relief to Apple, among the U.S. companies with the most to lose in the trade war between the world's two largest economies, along with chipmakers who make the components in its devices, which are mostly made in China.
The reason is tepid earnings results throughout 2019, according to analysts at DataTrek in a Monday note. “2019’s no-growth earnings will make for easy [comparables] in 2020 if the U.S.-China trade war abates,” DataTrek co-founder Nicholas Colas wrote. Colas said the final three months of 2019 should benefit from comparisons with last year, but Wall Street strategists now expect a 1.1% decline in earnings for the quarter.