Dow Jumps 250 Points As Trump Touts Stocks As ‘Greatest Leading Indicator Of Them All’
Stocks closed slightly higher on Monday after a midday rally–led by tech firms–prompted a tweet-spree from President Donald Trump, who at one point said that the stock market is the “greatest leading indicator of them all!!!” The gains come as Wall Street has turned attention away from fiscal stimulus and onto earnings seasons, which kicks off Tuesday with big banks reporting before the opening bell.
Stocks that outperformed the broader market included Amazon and Apple, which added 5% and 6%, respectively, in anticipation of Prime Day for the former and the iphone-12 release date for the latter–both of which occur on Tuesday; both firms alone account for more than 11% of the S&P 500’s total market value.
Twilio shares surged 8% on confirmation that the firm is acquiring customer data platform Segment in an all-stock deal worth $3.2 billion.
Outside the tech space, shares of department store Dillard’s skyrocketed up 27% after a regulatory filing revealed a private investment from a high-ranking Berkshire Hathaway money manager.
International markets, meanwhile, had a fairly lukewarm trading day: The United Kingdom’s FTSE 100 ended the day virtually flat, while France’s CAC 40 added less than .7% and Japan’s Nikkei 225 ended the day down roughly .3%.
Earnings season kicks off this week with most major banks (among the year’s hardest-hit stocks) set to report starting Tuesday; first up: JPMorgan and Citigroup before the opening bell.
Airlines–another embattled industry–also start reporting this week: Delta Air Lines is scheduled for Tuesday and United Airlines reports Wednesday.
Stocks ended last week up on the possibility of another broad-based coronavirus relief package, but negotiations between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin seemed ill-fated by week’s end, with Speaker Pelosi issuing a sharp rejection of the White House’s increased $1.8 trillion proposal on Saturday, adding that negotiations “remain at an impasse.” Trump’s stock-market lauding came as Wall Street experts lose hope in a coronavirus relief bill before the end of the year and warn that stifling aid could threaten an already sluggish economic recovery.
“Our economists believe there is enough momentum in the recovery to keep the U.S. economy on pace to return to pre-Covid levels of real GDP by the middle of next year,” Morgan Stanley equity strategists said in a Monday note to clients, adding that they’re now forecasting another round of coronavirus relief won’t come until next year. “For all of 2021, they see real GDP growing 5.5% on a year-over-year basis… Bottom line, a near term fiscal deal would be nice insurance but not necessary for economic recovery to continue.”
What To Watch For
The best-performing sectors this year, as tracked by S&P 500 ETFs through Friday’s close, include technology (up 32%), consumer discretionary (up 23%) and communications (up 13%). The worst-performing sectors are energy (down 36%) and financials (down 16%).
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Stocks End A Wild Week Up Amid Stimulus Whiplash (Fintech Zoom)