Trade Deal Clears Year End Rally

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as a trade deal clears year end rally. 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:

US futures point to higher open on Wall Street

U.S. stock index futures pointed to a cautiously higher open Monday morning.

The S&P 500 (SPY) rose +0.71% today. Sector advancers led decliners 10 to 1 as shown below in the sector graph. Energy (XLE), healthcare (XLV) and utilities (XLU) led advancers with gains of +1% or more. Communication services (XLC), consumer discretionary (XLY), consumer staples (XLP), financials (XLF), materials (XLB), real estate (XLRE) and technology (XLK) each had small gains of less than 1%. Industrials (XLI) had a minor loss of less than 1%.

The Dow Jones index added +100 points (+0.36%) to close at 28,235. The Nasdaq advanced +79 points (+0.91%) to settle at 8,814.

Trade Deal Clears Year End Rally

Stocks ended in positive territory Monday as a phase 1 trade deal has cleared the way for a year end rally.

“This has been the thing that, personally, I’ve been looking for all year,” said Kim Forrest, founder of Bokeh Capital, referring to the trade agreement. “Increased trade is going to allow companies to start spending again on capital expenditures. That had been frozen, and most of most of those are technology purchases.”

The U.S. and China announced Friday they will move forward with a so-called phase one trade deal. As part of the agreement, the U.S. will roll back some levies on Chinese products and China will increase its purchases of U.S. agricultural products. Treasury Secretary Steven Mnuchin said will be inked in January.

Last week, the Federal Reserve indicated it will keep rates at current levels through 2020.

Shares of Boeing, the aerospace giant fell after The Wall Street Journal reported Sunday the company was nearing a decision on possibly halting or cutting production of the 737 Max.

The report follows Federal Aviation Administration chief Steve Dickson telling CNBC last week the 737 Max jet’s return was unlikely to be cleared until 2020. “There are a number of processes, milestones, that have to be completed,” Dickson said. “If you just do the math, it’s going to extend into 2020.”

On the data front, the National Association of Home Builders/Wells Fargo Housing Market Index rose in December to its highest level in 20 years.

Key Takeaways…

I took the following CNBC screenshots today regarding 2020 risks, global markets 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

Trade Deal Clears Year End Rally

S&P 500 (SPY)

Trade Deal Clears Year End Rally

Communication Services (XLC)

Trade Deal Clears Year End Rally

Consumer Discretionary (XLY)

Trade Deal Clears Year End Rally

Consumer Staples (XLP)

Trade Deal Clears Year End Rally

Energy (XLE)

Trade Deal Clears Year End Rally

Financials (XLF)

Trade Deal Clears Year End Rally

Real Estate (XLRE)

Trade Deal Clears Year End Rally

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map

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