Week-In-Review: Another Bullish Week On Wall Street
The market continued to grind higher last week helping the tech-heavy Nasdaq composite trade above 9,000 for the first time ever. The S&P 500 and Dow Jones Industrial Average also hit fresh record highs. Meanwhile, the small-cap Russell 2000 and the mid-cap S&P 400 are both trading just below their respective record highs. In the short-term, the major indices are very extended and due to pullback. But the intermediate and long-term action remains very strong.
Monday-Wednesday’s Action:
Stocks rallied on Monday to kick off the shortened holiday week. Shares of Boeing rose after the company fired its CEO over the 737 Max crisis. Overnight, China said, starting January 1, it will lower import tariffs on over 850 products ranging from frozen pork to some types of semiconductors. China is making efforts to boost imports amid a slowing economy and a trade war with the U.S. Stocks were quiet on Tuesday as the market closed early on Christmas Eve. The market was closed on Wednesday for Christmas.
Thursday & Friday Action:
On Thursday, stocks rallied and the Nasdaq topped 9,000 for the first time ever. Shares of Amazon surged after the online retailer reported record sales over the Christmas shopping season. Stocks were relatively quiet on Friday as traders wrapped up the shortened holiday week.
Market Outlook: Easy Money Is Back
Once again, global central banks are back on the easy money bandwagon after the Fed and the ECB both announced more easy money measures directly aimed at stimulating global markets. The market has soared all year based on two key points: optimism that a trade deal will be reached between the U.S. and China and more easy money from global central banks. Earlier this year, the Federal Reserve reversed its stance and moved back into the easy money camp. Then, other central banks followed suit and that means easy money is back to being front and center for the market. Separately, the trade talks are moving in the right direction which is another positive. As always, keep your losses small and never argue with the tape.
