Investment Commentary –November 14th, 2017

Market Indices as of Market Close November 14th, 2017
Dow 23,409 (18.45% YTD)
S&P 2,578 (15.19% YTD)
NASDAQ 6,737 (25.17% YTD)
Global DOW 2,963 (17.98% YTD)
Gold $1,280 (9.85%)
OIL $56.90 (-3.05%)
US 10Y Treasury 2.376 (-7.10%)
Barclay Bond Aggregate (2.96% YTD)

 

Stock market trades lower as oil comes under pressure

U.S. stock benchmarks traded lower, but off their intraday lows, on Tuesday, with Wall Street slumping in the face of uncertainty around efforts to reform tax policy and a downturn in crude-oil futures.

What are the main benchmarks doing?

The Dow Jones Industrial Average DJIA, -0.13% traded off 37 points, or 0.2%, to 23,400, but the blue-chip gauge had been down by as much as about 170 points on the session. Declines in shares of Goldman Sachs Group Inc., Apple Inc. AAPL, +0.05% Walt Disney Co. DIS, -1.49% and DowDuPont Inc. DWDP, +0.01% were dragging the average lower.

The S&P 500 index SPX, -0.23% fell 7 points, or 0.3%, at 2,578, with only the utilities and consumer-staples sector, considered defensive plays, punching markedly higher. The sectors most tied to the crude market, energy and materials, led losses, each down at least 1% as the International Energy Agency said the oil-price rally may be ephemeral.

Meanwhile, the Nasdaq Composite Index COMP, -0.29% dipped 25 points, 0.4%, to 6,731.

What is driving markets?

Concerns about delays in much-anticipated corporate-tax cuts out of Washington have been acting as a drag on stocks.

Massachusetts Democratic Senator Elizabeth Warren on Tuesday said that the Republican tax plan will force small-business owners to subsidize big corporations and will harm the U.S. economy by reducing tax revenue for infrastructure that supports economic growth.

Meanwhile, the Wall Street Journal reported that Mohamed El-Erian, chief economic adviser at Allianz, is being considered for the No. 2 role at the Federal Reserve. President Donald Trump nominated Fed. Gov. Jerome Powell to replace Chairwoman Janet Yellen when her term as Fed boss ends in February.

News around the web:

Streak snapped

The S&P 500 and the Dow both slipped for the week, ending an eight-week run of gains that sent the S&P 500 up about 5% and the Dow up 8%. The NASDAQ Composite also fell slightly, snapping a string of six positive weeks in a row.

Taxing matters

Tax policy was one of the week’s negative catalysts for stocks. A Senate version of President Trump’s tax overhaul significantly differs from the House’s proposal, which could complicate talks to reconcile the measures. For example, the Senate bill would delay a cut in the corporate tax rate by a year relative to the House version.

On tap this week:

Wednesday: Consumer Price Index, U.S. Bureau of Labor Statistics
Friday: Housing starts, U.S. Census Bureau

LEADERS & LAGGARDS

Leaders this week were Utilities. . Laggards were Basic Materials, Healthcare and Industrial Goods..

This day in financial history: November 14, 1991

Idea Causes Decline

The slumping American economy was a major concern for President Bush in 1991. In an effort to alleviate some of the nation’s economic problems he discussed the idea of capping credit card interest rates. This idea leaked and angered many investors and stock traders. On this day in 1991 the leak caused a day of panicked trading causing the Dow to loose 120 points.

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.

https://www.econedlink.org/economic-calendar.php?month=11
https://www.marketwatch.com/story/us-stock-futures-sag-as-investors-fail-to-shake-fears-of-a-pullback-2017-11-14