Stock Market News – 2-16-19
Markets
It was a big up week for the market, with the DOW rising over 3%, and the S&P up 2.5%, the NASDAQ up 2.4%, and the Russell small caps up a whopping 4.25%. Rising oil prices, and some positive news on trade talks helped to lift the market.
Progress in the U.S.-China trade talks helped send world stock markets broadly higher on Friday and pulled investors out of the safety of government bonds. China and the United States reached a consensus in principle on some key issues during the talks, China’s state news agency Xinhua said on Friday. Negotiations will continue next week in Washington as investors hope for an end to the trade war between the world’s two largest economies.
High Dividend Stocks
These high yield stocks go ex-dividend next week – NYSE:APO, NYSE:MAC, NYSE:MAIN.
Volatility
The VIX fell -7.6% this week, ending at $14.91.
Forex
It was a split week for the greenback – the USD rose versus the euro, the pound, Swiss franc, and the yen, but fell versus the Loonie, and the New Zealand dollar and Australian dollar.
Market Breadth
29 DOW 30 stocks fell this week, vs. 21 rising last week. 87% of the S&P 500 rose this week, versus 56% rising last week.
Economic News
“U.S. manufacturing output fell steeply in January as motor vehicle production posted its biggest fall since 2009, with declines in a broad range of goods likely to fuel fears of a sharp slowdown in factory activity. The Federal Reserve said on Friday manufacturing production slumped 0.9% last month, the deepest drop in eight months. Data for December was revised to show a smaller increase in output that month than initially reported.
Production of motor vehicles and parts dropped 8.8 % in January, the steepest decline since May 2009, when the United States was still mired in a deep recession. Output also fell last month for machinery, chemicals, electronics and aerospace equipment. Total industrial output – which includes factories, mining operations and utilities – dropped 0.6 percent during the month. It was the first decline since May 2018.” (Reuters)
“U.S. consumer prices were unchanged for a third straight month in January, leading to the smallest annual increase in inflation in more than 1-1/2 years, which could allow the Federal Reserve to hold interest rates steady for a while. The Labor Department said on Wednesday its Consumer Price Index last month was held down by cheaper gasoline, which offset increases in the cost of food and rents. In the 12 months through January, the CPI rose 1.6 percent, the smallest gain since June 2017. The CPI increased 1.9 percent on a year-on-year basis in December.”
Week Ahead Highlights
U.S. markets will be closed on Monday, in observance of the President’s Day holiday.
Next Week’s US Economic Reports
Futures
WTI Crude rose 6.6% this week, finishing the week at $56.20, while Natural Gas rose 1.9%. “Oil prices gained more than 2 percent on Tuesday, supported by OPEC-led production cuts, which Saudi Arabia said it would surpass by more than half a million barrels per day (bpd), and by U.S. sanctions against Iran and Venezuela. Saudi Arabia, the world’s top oil exporter and de facto leader of OPEC, said it would reduce crude production to around 9.8 million bpd in March, over half a million bpd more than it originally pledged.
Energy Minister Khalid al-Falih announced the move in an interview with the Financial Times published on Tuesday, as the kingdom seeks to drive up oil prices to help fund an economic transformation plan. However, rising U.S. oil production, fighting near Libya’s main oilfield, sanctions on Venezuela and suspense over whether Washington will grant more waivers to import Iranian oil leave markets unsure about broader supply.”
