It was just one of those sessions on Thursday where the market couldn’t get out of the gate, and even Walmart (WMT) gave up its early morning gains.
Still, the S&P 500 eked out another record high; 101 times that’s happened since Donald Trump took office.
Eight of the eleven sectors were higher.
S&P 500 Index | +0.08% | |
Communication Services (XLC) | +0.45% | |
Consumer Discretionary (XLY) | +0.43% | |
Consumer Staples (XLP) | -0.03% | |
Energy (XLE) | -0.27% | |
Financials (XLF) | +0.20% | |
Health Care (XLV) | +0.01% | |
Industrials (XLI) | +0.32% | |
Materials (XLB) | +0.62% | |
Real Estate (XLRE) | +1.00% | |
Technology (XLK) | -0.12% | |
Utilities (XLU) | +0.35% |
Just Waiting
Nonetheless, the overall feeling was the market was marking time, just kind of waiting for something to provide the next spark; considering all the major macro inputs are down this month, including the jobs report, and now earnings season is winding down.
However, the trade situation is coming up against a hard deadline of sorts. With the December 15th tariffs in the cue, there is a sense something must happen between now and then. The financial media spends each day making a mountain out of an ordinary molehill.
Guess what? Negotiations have fits and false starts, and there are breakdowns and all kinds of other shenanigans before terms are agreed upon. I often feel as if many in the media are being useful tools in Chinese negotiations with non-stop stories of a negative impact if a deal isn’t done. Ironically, President Trump is not only not intimidated by these stories. He actually relishes the challenge.
I believe the trade situation will work itself out, and I believe America is winning. The goal isn’t to punish either economy, but to open them up for fair trade rather than the kind of stuff that was truly eroding the nation’s wealth foundation.
For the most part, the rally is on autopilot but needs a spark to put it into overdrive.
Market Breadth
The NASDAQ Composite was weighed down by Technology stocks, which stumbled in the wake of Cisco (CSCO) earnings miss.
There could be pressure this morning as NVidia (NVDA) shares began to slump after initially popping on its earnings release. This company is going to be a powerhouse in many areas, including artificial intelligence, but the hype factor is a heavy burden. Conversely, Applied Materials (AMAT) posted strong results, and the stock held its gains into the evening.
NASDAQ
- Advancers: 1,423
- Decliners: 1,723
- New Highs: 97
- New Lows: 120
- Up Volume: 1.07 billion
- Down Volume: 966.8 million
The NYSE is benefiting from a late entry from big money, looking for value and equity exposure. Interestingly, one of the biggest winners in after-hours trading was Restoration Hardware (RH) after it was revealed that Warren Buffett has taken a strong position. It’s not unusual for Buffett to be attracted to a furniture store, as RH is up 46% this year and 444% over the past three years.
NYSE
- Advancers: 1,632
- Decliners: 1,300
- New Highs: 91
- New Lows: 75
- Up Volume: 1.18 billion
- Down Volume: 1.69 billion
Portfolio Approach
We closed a Health Care (XLV) position for a monster gain, and we only have one position bold. We may adjust our weightings there, which has been driven mostly by valuation proposition.
Today’s Session
Headline retail sales rose 0.3% m/m vs. 0.2% expected. Core retail sales rose only 0.1% MoM vs. +0.3% expected.
The modest rebound was led by sales gains for auto dealers and gas stations, though declines in clothing and furniture stores tempered the advance.
October 2019 | Total In millions USD | M/M | Y/Y |
Headline | $5,101,958 | +0.3% | +3.1% |
Ex-Motor | $4,057,611 | +0.2% | +2.8% |
Motor | $104,580 | +0.5% | +4.5% |
Furniture | $9,844 | -0.9% | +0.9% |
Electronics | $7,621 | -0.4% | -3.4% |
Building Materials | $33,264 | -0.5% | -2.0% |
Food Including Groceries | $65,582 | +0.5% | +3.2% |
Health and Personal Care | $30,494 | 0.5% | +1.9% |
Gasoline | $44,376 | +1.1% | -5.0% |
Clothing | $21,113 | -1.0% | -2.7% |
Sporting Goods | $5,918 | -0.8% | +0.2% |
General including Department Stores | $58,626 | +0.1% | -6.9% |
Miscellaneous | $12,129 | -0.6% | +4.3% |
Internet | $66,119 | +0.9% | +14.3% |
Food Including Restaurants & Bars | $65,323 | -0.3% | +4.7% |
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