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For the Results of the morning’s Trading Plans, please click here.
THE GIST (“THE WHAT”)
The S&P 500 index logged a fresh new record high close after a batch of better-than-expected corporate earnings helped overshadow disappointing earnings from industrial conglomerates Caterpillar Inc. and Boeing Co.
Opening lower and struggling for direction for early session amid U.S. – China trade concerns, the index gained a steady upward momentum in the afternoon session to close at 3019.57, up 14.09 points and gaining 0.47% over previous session’s close. Primarily driven by earnings, eight out of the eleven primary sectors posted modest gains with Financials, Communication Services and Technology stocks leading the advances.
THE DETAILS (The “How & Why”):
Treasury yields edged lower with the 10-year Treasury yield settling lower at 2.05% as investors await key monetary policy decision by ECB (European Central Bank). The broader Financials sector, however, outperformed to lead the broader index by gaining 0.91% on the back of strong quarterly earnings.
Technology, Communication Services and Consumer Discretionary posted strong gains, closing higher by 0.86%, 0.88% and 0.54%, respectively. FANG stocks retreated at the open on growing regulatory concerns, but managed to close with slight gains as investors keenly await the results of Facebook Inc. AT&T Inc. and Chipotle Mexican Grill soared on better-than-expected earnings. Edwards Lifesciences Corp. and W.W. Grainger Inc. were the top gainers of the session, soaring more than 9% apiece on solid earnings.
Texas Instruments Inc. surged 7.44% to hit its all-time highs on beating earnings estimates and guiding higher despite ongoing trade concerns. Microchip Technology, Lam Research Corp., Analog Devices Inc. and Xilinx Inc. all rose more than 3% apiece on optimistic outlook by Texas Instrument Inc.
Industrials sector managed to post modest gain of 0.40%, despite being weighed down by disappointing earnings from Caterpillar Inc. and Boeing Co. Caterpillar Inc. fell 4.48% after the heavy construction equipment manufacturer missed earnings estimates and guided lower for the fiscal year 2019 amid rising expenses due to international tariffs and falling demand from North American oil and gas clients.
Boeing Co. tumbled 3.12% on posting a record quarterly loss in over two decades from the financial damage due to the grounding of its flagship 737 Max jet fleet. Better-than-expected earnings by UPS Inc., Northrop Grumman Corp and W.W. Grainger Inc. helped offset losses within this space.
On the other hand, Consumer Staples was the biggest drag on the index, closing 0.64% lower. Rollins Inc., MarketAxess Holdings Inc. and Amphenol Corp. were the worst decliners of the session, tumbling 10.46%, 9.12% and 6.08%, respectively on missing earnings estimates.