Hi Everyone,
Despite a bearish start to the week, especially in Asia and Europe, nearly all of the main sectors closed the day in the green. The defensive healthcare, utilities, and consumer staples sectors were the negative outliers, which is usually a good sign for the broader market, while energy-related issues also showed weakness later in the session. Financials, industrials, and materials finished flat amid the volatile swings in Treasury yields, with tech stocks, communication services, and real estate stocks spearheading the intraday rally.
Traders said that today’s session was a major confidence boost for bulls as stocks held on to last week’s healthy gains. As one trader explained, “The broad-based S&P 500 got close to the 4,500 level today, while the Nasdaq topped 15,000 building on last week’s bullish momentum, and the relative strength of the U.S. market could mean that we will soon see new all-time highs on Wall Street.”
Apple (AAPL, +1.2%) and Facebook (FB, +3.3%) have been clearly lagging the tech sector leaders for nearly two months, but today the shares of both companies enjoyed tailwinds. Apple announced a slew of new products, with especially the new MacBook Pros promising a major upgrade cycle, propelling the company’s stock to a three-week high. Likewise, Facebook’s shares were boosted by the company’s announcement regarding a major bet on its virtual-augmented reality segment, which, according to many top analysts, could be a major driver of growth in the coming years.
The first days of the earnings season were better than even the lofty expectations regarding the third quarter, but we are in for another crucial week of reports. So far, over 80% of the reporting companies have beaten expectations, and while the second quarter was the most bullish on record, this quarter appears to be on par with it. The first major names, like Johnson & Johnson (JNJ, -0.7%), Procter & Gamble (PG, -1.4%), Philip Morris (PM, -0.9%), and Netflix (NFLX, +1.5%), will publish their quarterly numbers tomorrow, with the three consumer giants all reporting in pre-market trading.
“Success is not final, failure is not fatal: it is the courage to continue that counts.”
Winston Churchill
As always, have a great evening and stay tuned!!
