Wall Street showed continued momentum on hopes for another round of stimulus with President Donald Trump now expressing openness to a larger fiscal package — and more in Friday’s stock market update.
Larry Kudlow, Director of the National Economic Council, said Trump has approved a revised package of $1.8 trillion and would like to do a deal to provide more economic stimulus.
Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, D-Calif, continued talks but Senate Majority Leader Mitch McConnell, R-Ky., said a coronavirus stimulus package is unlikely in the next three weeks. Despite the uncertainty, the major indexes recorded their best week since early August.
The Nasdaq gained 1.4% with the afternoon high reaching 11,581.
The S&P 500 rose 0.9% with the midday peak hitting 3,482.
The Russell 2000 rose 0.6% following the morning push to 1,645.
The Dow traded to an intraday high of 28,676 while closing higher by 0.6%.
For the week, the Russell 2000 surged 6.4% while the Nasdaq zoomed 4.6%. The S&P 500 rallied 3.8% and the Dow soared 3.3%.
Technology was the strongest sector after rising 1.5% while Consumer Discretionary and Healthcare gained 1% and 0.9%, respectively. Energy led sector weakness after stumbling 1.6%.
Xilinx Inc. (Nasdaq: XLNX) shares were up 14% after the Wall Street Journal reported Advanced Micro Devices, Inc. (Nasdaq: AMD) is in advanced discussions to purchase the company in a deal that could be valued at over $30 billion.
The deal would be accretive to AMD given its low margins, but there is chatter that Xilinx’s management is against being acquired given its dominant and improving position in the high-margin programmable logic device market.
The third-quarter earnings season gets underway on Tuesday. The Financial sector will be in focus throughout the week starting with Citigroup Inc. (NYSE: C) and JPMorgan Chase & Co. (NYSE: JPM) announcing before Tuesday’s opening bell.
JPMorgan Chase & Co. is expected to report a profit of $2.17 on revenue of $28.17 billion. The company missed forecasts by $1.06 in the first quarter but beat by 34 cents in the second quarter.
Wall Street analysts have pegged Citigroup earnings at 89 cents a share on revenue of $17.17 billion. The company has topped forecasts over the past four quarters.
There is a chance for major moves by both stocks depending on the severity of the beat, or miss. The aforementioned numbers are the average based on the analysts research with the high estimate for JPMorgan at $2.84 and the low at $1.68.
European markets settled higher to close the week.
France’s CAC 40 and UK’s FTSE 100 advanced 0.7% while the Stoxx 600 rose 0.6%. The Belgium20 climbed 0.5% and Germany’s DAX 30 edged up 0.1%.
Asian markets closed on both sides of the ledger after data showed that Chinese domestic tourism witnessed a robust rebound over the just-ended Golden Week holiday.
China’s Shanghai jumped 1.7% and South Korea’s Kospi added 0.2%. Australia’s S&P/ASX 200 was up less than a point. Hong Kong’s Hang Seng fell 0.3% and Japan’s Nikkei slipped 0.1%.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) zigzagged for the fourth-straight session after tapping an intraday low of $158.81. Current and upper support at $159-$158.50 was breached but held. A close below the latter and the 200-day moving average would suggest additional weakness towards $157.50-$157.
Lowered resistance is at $160-160.50 followed by $161.50-$162.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the third straight session with the morning low reaching 24.03. Current and upper support at 25.50-25 and the 50-day moving average was recovered.
Lowered resistance is at 26.50-27 followed by at 29.50-30 and the 200-day moving average.
The SPDR Small-Cap 600 ETF (NYSE: SLY) was up for the third straight session and for the seventh time in eight sessions after testing a morning high of $66.39. Prior and lower resistance from early August at $66-$66.50 was cleared but held. A close above the latter would be an ongoing bullish signal for a retest towards $67.50-$68 and levels from mid-February.
Rising support is at $65.50-$65 followed by $64-$63.50.
RSI (relative strength indicator) is in an uptrend with key resistance at 70 holding. A close above this level would signal additional strength towards 75 and the early June peak. Support is at 65-60.
The iShares PHLX Semiconductor ETF (Nasdaq: SOXX) extended its winning streak to three straight sessions with the intraday and fresh all-time high hitting $326.12. Uncharted territory and lower resistance $326-$326.50 was cleared but held. A close above the latter would indicate an ongoing breakout with upside potential towards the $327.50-$330 area.
Near-term and rising support at $323-$322.50 followed by $321-$320.50.
Check back after the closing bell each day for the most important news and numbers in the WealthPress stock market update.