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Market Update

Stocks Trying for More Gains as Bearish Headlines Barely Dent the Mood

Print
November 25, 2015

Early stock gains take shape Wednesday after a flurry of mostly bearish headlines in yesterday’s pre-market were shrugged off, allowing the major stock averages to log higher finishes by the closing bell. Watch for early action in response to a flurry of economic news but then gradually emptying desks as participants head home for the Thanksgiving holiday. U.S. financial markets are closed Thursday. Stock trading ends early, at 1 p.m. Eastern on Friday.

For now, relatively upbeat economic data (or at least no major surprises) trumps global tensions and spotty earnings news. It’s an economic backdrop that many on Wall Street believe sets up the Federal Reserve for a gradual reversal of extreme monetary policy—a Fed approach that has been well-telegraphed and that the Street has had time to get used to. The Fed meets next month and a majority of Fed-watchers thinks the panel will raise its Fed funds rate by a quarter-point, the first increase in nearly a decade.

S&P 500 stock chart

FIGURE 1: 2100 -- FORMIDABLE LINE?

The S&P 500 (SPX), charted here on the thinkorswim® platform, recovered early losses to end higher on Tuesday. Energy share gains, with oil prices rising after reports of Turkey’s downing of a Russian jet fighter near the Syrian border, helped to lift the broader market. Data source: Standard & Poor’s. For illustrative purposes only. Past performance does not guarantee future results.

Cornucopia of Economic Data. This morning, more data flows. U.S. orders for durable goods rebounded in October to show the first increase in three months, led by a surge in demand for commercial airplanes. Meanwhile, the number of people who applied for U.S. unemployment benefits fell by 12,000 to 260,000 in the week before Thanksgiving, keeping up the trend of a gradually improving labor market. Another release revealed that consumer spending rose slightly in October, the second straight month for anemic growth in this report, which also showed U.S. personal savings at a three-year high. Readings on consumer sentiment and new-home sales hit later in the morning.

Deere Surprises Street. Deere & Co. (DE) shares are strong early gainers after the heavy farm equipment maker’s fiscal Q4 profit and sales handily beat Wall Street’s expectations. Deere execs said cost cuts helped offset weakness in global markets for farm and construction equipment.

HPQ Lower After Results. Hewlett-Packard Co., newly named HP Inc., (HPQ) is an early decliner after the tech heavyweight late Tuesday reported mostly disappointing quarterly results and forecasts. It’s a tricky report with name changes and divisional shifts, but essentially Wall Street is focusing on disappointing sales figures. HPQ said revenue fell 9% from the same period last year to $25.7 billion. For fiscal 2016, HP Inc., which now houses its printing and personal systems businesses, is calling for adjusted earnings per share (EPS) at between $1.59 and $1.69 for fiscal 2016; that’s below Street expectations for $1.70.

Have a wonderful Thanksgiving!

Good Trading,

JJ

@TDAJJKinahan

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