Week-In-Review: Nasdaq 100 Hits Fresh Record High
The market rallied for the fourth straight week as investors digested a slew of earnings and the latest round of economic data. The tech-heavy Nasdaq 100 hit a fresh record high last week and was the first big index to do so. Typically, that bodes well as the Nasdaq 100 tends to lead its peers, both up and down. Barring some unforeseen decline, the other major averages will likely hit new highs as well. Looking forward, near-term support is the 50 DMA line and near-term resistance is the 2019 record high for the Dow, S&P 500 and the Nasdaq Composite. Next week, we have a slew of more earnings coming out including, Apple and the next Fed meeting.
Stocks rallied on Monday helped by optimism around U.S.-China trade talks and corporate earnings. Over the weekend, Chinese Vice Premier Liu He said Beijing would work with the U.S. to address one another’s trade concerns and that both sides have made “substantial progress” on trade. China’s chief negotiator in the trade talks also said that stopping the trade war would be good for both countries — as well as the global economy. That was enough to help the market rally. Separately, shares of Apple led the Dow higher, rising more than 1% to a record high after an analyst at Raymond James raised his price target to $280 per share from $250. Those gains offset a big drop in Boeing’s stock.Stocks slid on Tuesday after the latest round of earnings were released. In other news, shares of Biogen surged more than 26% after the drugmaker announced it will seek regulatory approval for its Alzheimer’s treatment.
Stocks rallied on Wednesday after investors focused on the latest round of earnings and economic data. A slew of earnings reported earnings and the earnings were mixed. Caterpillar was one of the Dow stocks that rallied after reporting numbers. Caterpillar said it earned $2.66 per share in the third quarter, versus the Refinitiv consensus estimate of $2.88 per share. Revenue came in at $12.758 billion, while Wall Street expected revenue of $13.572 billion. Elsewhere, Boeing shares climbed over 3% after the company said it will stick to its timeline for the return of the 737 Max and that was enough to offset lousy earnings.The company reported a profit of $1.45 per share. Analysts polled by Refinitiv expected a profit of $2.09.
Thursday & Friday Action:
On Thursday, stocks were mixed as the latest round of earnings were released. Shares of Tesla, and Microsoft rallied after reporting earnings while shares of 3M and Twitter fell. Tesla was up close to 20% after reporting earnings and Twitter fell 20% after reporting earnings. Stocks rallied on Friday as the Nasdaq 100 hit a fresh record high.
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.