My friends, this is what a bull market looks like! Just look at the chart above! The market ended higher last week as investors digested a slew of mostly positive earnings and economic data. The big economic news came on Friday when the government reported a stronger-than-expected jobs report. So far, earnings are mixed to mostly higher. Apple (AAPL), Netflix (NFLX), Facebook (FB), Tesla (TSLA), Shopify (SHOP), Weight Watchers (WTW), Remax (RMAX), and Boeing (BA), are some of the well-known stocks that are up while: Amazon (AMZN), Google (GOOG), Applied Optoelectronics (AAOI <<check out our YouTube video on this one), Mercadolibre (MELI), and 3M (MMM) fell after reporting earnings.
For the week, the Dow and S&P 500 rallied while the Nasdaq and small-cap Russell 2000 fell. The S&P 500 is tracing out a bullish 3-weeks tight pattern and is setting up nicely to move higher from here. The Dow is very extended to the upside and over due to pullback. The next level of support to watch is the 50-day moving average lines for the major indices.
A Closer Look at What Happened Last Week…
On Monday, stocks ended mixed as the Dow Jones Industrial Average approached 22,000. So far, 73% of the S&P 500 companies that have already reported earnings posted stronger than expected numbers on both the top and bottom lines, according to data from FactSet. In economic news, pending home sales increased by +1.5% in June, beating estimates for +0.9%.
Stocks edged higher on Tuesday as the Dow flirted with 22k. The ISM manufacturing index came in at 56.3, just beating estimates for 56.2. After Tuesday’s close, Apple gapped up after reporting another very strong quarter. Apple’s big rally was enough to send the Dow above 22k on Wednesday.
Thur & Fri Action:
Stocks rallied again on Thursday as investors digested a slew of earnings and waited for Friday’s jobs report to be announced. The political drama continued with President Trump and Russia after the WSJ reported that Special Counsel Robert Mueller impaneled a grand jury in his investigation into Russia’s involvement in the U.S. election.
Before Friday’s open, the government said U.S. employers added 209,000 new jobs last month easily beating the Street’s estimate for 178,000. The stronger than expected jobs report paved the way for the Fed to raise rates again later this year.
Market Outlook: Earnings Remain Front and Center
Capital continues to flow into U.S. equities helping the Dow soar, and close, above 22k. The bulls showed up and defended important support in June which is very bullish for the market. As we have said several times over the past month, as long as support holds, the bulls remain in control of this market. As always, keep your losses small and never argue with the tape.