The coronavirus continues to linger, but the fear pendulum has shifted from a global pandemic to missing this equity block party. Once again, all three major indices are higher on a continued flow of strong economic data, and perhaps it’s a chance for Washington, D.C. to hit the reset button.
- S&P 500: +3.6%
- NASDAQ Composite: +6.7%
- Dow Jones Industrial Average: +3.0%
- Russell 2000: +0.5%
The search for value continued in a week that has seen the resurrection of beaten-down old favorites, such as International Business Machines (IBM) and Biogen Inc (BIIB). Twitter (TWTR) joined the party after inventing a valuation metric (measurable daily active users) and then blowing it away.
S&P 500 Index | +0.33% | |
Communication Services (XLC) | +1.25% | |
Consumer Discretionary (XLY) | -0.22% | |
Consumer Staples (XLP) | +0.17% | |
Energy (XLE) | -1.02% | |
Financials (XLF) | -0.13% | |
Health Care (XLV) | +0.09% | |
Industrials (XLI) | +0.32% | |
Materials (XLB) | -0.05% | |
Real Estate (XLRE) | +0.43% | |
Technology (XLK) | +0.91% | |
Utilities (XLU) | +0.03% |
Can Boeing Get Airborne?
Speaking of beaten-down stocks that can move the entire market, few publicly traded companies are more important than Boeing (BA). The hits keep coming for the 737 Max, but there is a sense they will be back in action sometime this summer.
The stock has made a series of lower highs. Most likely, that reverses with a close above $355.00 - from there, the stock could travel to $400 very quickly.
Market Breadth
Although the market staved off early weakness, it’s clear 1,100 Dow points in four sessions feel toppy; hence, the market breadth saw more decliners than advancers, although 52-week highs dwarfed 52-week lows:
NYSE
- 1,404 advancers
- 1,508 decliners
- 261 - week highs
- 32- week lows
NASDAQ
- 1,496 advancers
- 1,678 decliners
- 184 new highs
- 47 new lows
Earnings Parade
After the close on Thursday, a big slew of names beat the Street, and offered guidance that sent their share prices higher:
- Pinterest (PINS)
- Uber (UBER)
- Penn National Gaming (PENN)
- Wynn Casino (WYNN)
- Silicon Motion Technology (SIMO)
Portfolio Approach
We added a new Technology idea to the model portfolio.
Jobs Report
Today, all eyes will be on the jobs report for January 2020.
Forecast
- Total Non-Farm Payrolls: 163,000
- Private Payrolls: 150,000
- Manufacturing: -1.000
- Unemployment Rate: 3.5%
- Average Hourly Wages: 0.3
Today’s Session
The January nonfarm payroll came in at 225,000 new jobs, of which 206,000 were in the private sector. Hourly wages increased 0.2% for the month and are up 3.1% year over year. The unemployment rate ticked up to 3.6%, but that is largely in part to the Labor Participation rising to 63.4%. December was revised higher to 147,000 from 145,000 and November’s numbers increased to 261,000 from 256,000.
The markets are under pressure this morning.
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