Phase One Already Baked In
Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as phase one already baked in. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:
U.S. stock index futures were slightly lower Wednesday morning as investors await the signing of the U.S.-China “phase one” trade deal. At around 1:30 a.m. ET, Dow futures fell 49 points, indicating a negative open of more than 14 points. Futures on the S&P and Nasdaq were also marginally lower.
The S&P 500 (SPY) rose +0.19% today. Sector advancers led decliners 8 to 3 as shown below in the sector graph. Utilities (XLU) led advancers higher with a +1.40% gain. Communication services (XLC), consumer staples (XLP), healthcare (XLV), industrials (XLI), materials (XLB), real estate (XLRE) and technology (XLK) each enjoyed minor gains of less than 1%. Consumer discretionary (XLY), energy (XLE) and financials (XLF) each suffered small losses of less than 1%.
The Dow Jones index added +90 points (+0.30%) to close at 29,030. The Nasdaq was in the green by +7 points (+0.08%) to settle at 9,258.
Phase One Already Baked In
Stocks ended higher Wednesday as phase one of the US China trade agreement was signed.
Investors knew most of the details already and some bumps in the road are anticipated on signing a phase two trade agreement.
The U.S.-China trade agreement includes provisions to curb intellectual property theft along with forced technology transfers. It also increases Chinese purchases of U.S. products. Investors had been eagerly awaiting the signing of the so-called phase one trade agreement as the conflict between the world’s largest economies has dragged on for nearly two years.
Sentiment was aided earlier amid comments from White House economic advisor Larry Kudlow, who said the Trump administration would unveil more tax cuts later this year.
Bank of America reported quarterly results that beat analyst expectations as bond-trading revenue ripped higher.
Goldman Sachs posted a revenue for the quarter that surpassed estimates. BlackRock, UnitedHealth and PNC Financial also posted quarterly earnings that beat analyst expectations.
So far, about 30 S&P 500 companies have released their quarterly numbers. Of those companies, 82% have posted better-than-expected profits, according to FactSet data.
I took the following CNBC screenshots regarding phase one trade deal, Cramer’s trade deal picks and driving the action:
Notable S&P 500 Movers…
Below I’ve highlighted some notable S&P movers (both winners & losers).
Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.
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S&P 500 Sector Graph
S&P 500 (SPY)
Communication Services (XLC)
Consumer Discretionary (XLY)
Consumer Staples (XLP)
Real Estate (XLRE)
S&P 500 Sector Heat Map
Episode 1 goes over my basic investment strategy for individual investors (from years of watching and learning from CNBC).