It was a bullish week for US equity indexes, with net weekly gains ranging from +3.1% (Transports), +1.2% (Dow), +1.1% (Nasdaq comp'), to +0.8% (SPX, NYSE comp').
Lets take our regular look at five of the main US indexes
A fifth consecutive net weekly gain, +26pts (0.8%) to 3090, having broken a new historic high of 3097. More broadly, monthly price momentum continues to tick upward, as the m/t trend remains solidly intact. I would note the key 10MA at 2927, which is climbing by around 25/30pts per month.
Tech settled +88pts (1.1%) at 8475, having broken a new historic high of 8484. More broadly, note monthly price momentum has turned positive for the first time since Oct'2018.
The mighty Dow settled +333pts (1.2%) to 27680, having broken a new historic high of 27774. More broadly, monthly price momentum remains negative, but is set to turn positive at the Dec'2nd open.
The master index climbed for a fifth consecutive week, settling +107pts (0.8%) to 13407. More broadly, monthly price momentum has turned positive for the first time since May 2018. A break above the Jan'2018 historic high of 13637 would bode very positive for the main market.
The 'old leader' - Transports, saw a net weekly gain of +328pts (3.1%) at 11067. More broadly, monthly price momentum continues to tick upward, and is set to turn positive in December.
All five equity indexes settled net higher for the week.
The SPX, Dow, and Nasdaq comp' broke new historic highs.
More broadly, all five indexes are holding above their respective monthly 10MA.
YTD price performance:
The Nasdaq comp' continues to lead, currently +27.7%, with the SPX +23.4%, and the Trans +20.7%. The Dow is +18.7%, with the NYSE comp' +17.9%.
A lighter week is ahead, at least in terms of scheduled earnings and econ-data. The main event will be Powell on Wednesday.
M - FNV
T - CRON, TSN, OSTK, DHI, TLRY, SWKS
W - CSCO, NTAP, BZH
T - WMT, VIA, SINA, IGT, NVDA, CGC, ACB, AMAT, WPM
F - JCP, JD
M - *bond market closed*
W - CPI, US T-budget
*Powell is due 11am, before the Congressional Joint Economic Committee, to present 'The Economic Outlook'. That will doubtless garner considerable media and market attention.
T - Weekly jobs, PPI, EIA Pet' & NG reports, Fed balance sheet
*Powell is due 10am, before the House Budget Committee to present 'The Economic Outlook.
F - Retail sales, Empire state manu', import/export prices, indust' prod', busi' invent'. *OPEX*
With a trio of index historic highs, it was a bullish week for the US equity market. Whilst I still see rate cuts as a negative, the renewed QE from the Fed has to be seen as a positive for most asset classes. Of all the sectors and stocks, I would argue Bank of America is perhaps the most important...
Bank of America, along with most of the other financials has been broadly stuck since early 2018.
November's price action is already more than decisive, with a monstrously bullish breakout above key price threshold of the $32s. The break >32s offers a basic run to the $38s, with secondary target of the Oct'2007 historic high of $43.40.
The implications for the rest of the sector, and the main market should be clear. Whilst that doesn't preclude any sporadic s/t washout (we've downside gaps to sp'2911/2893), it does mean any such cooling wave would have to be seen as such.
I would understand if some of you might argue I am cherry picking one stock or sector. However, if I had the time and energy, I'd also highlight JPM, AAPL, MSFT, INTC, TGT, CAT, or even a mid tier stock like AMD.
One thing we've not seen since 2010/11, is any sustained upside in commodities. In addition to further QE from the Fed and other central banks, a weaker USD sure would help.
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Have a good weekend
*the next post on this page will likely appear 5pm EST on Monday.