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After The Close - The Dow Jones Industrial Average hit an all-time high today, trading up to 26,824.78 (up 173.57 from the prior close). The S&P 500 also was higher in early market trading. Meantime, the Russell 2000 started the day lower. Importantly, as the day progressed, these indices fell from earlier prices, rebounding just before 4PM. Declining equities outpaced advancers by a rate of 1.5 to 1 on the big board, suggesting the move lower was broad. Consumer staples and utility stocks, the relative safe-haven areas, outperformed on the day and financials and consumer discretionary issues lagged the broader markets.

Meantime, the Federal Reserve Chairman, Jerome Powell, gave a speech earlier today where he stated that inflation remained low due to the Fed managing expectations, despite low unemployment. However, he said that the Fed would “act with authority” if inflation should materially differ from its stated objective of 2%. In addition, he mentioned that potential trade tariffs, both against the EU and China, could stoke inflation, but stated “we don’t see that in the data”.  These remarks suggested that the Federal Reserve could be more aggressive in hiking rates in the future.

In other news, Amazon (AMZN) announced a move to raise its minimum wage of all its U.S. workers to $15 per hour, garnering praise from both President Trump and Sen. Bernie Sanders. This caused many retail stocks to fall on the day, as fears of higher labor costs and reduced earnings expectations likely weighed on those equities.

Meantime, several auto stocks reported third-quarter sales totals. Ford’s (F) sales in September were down 11%, as it faced tough year-over-year comparisons. Hurricane Harvey destroyed autos in the Houston Area in 2017, but Hurricane Florence hurt sales in the Carolinas this year. General Motors (GM) also recorded an 11% sales decline during the third quarter. On the other hand, Fiat Chrysler’s (FCAU) sales grew 15% year over year in September, suggesting that market share was taken from other producers.

Looking ahead, a few key economic reports are expected tomorrow, including the EIA report on oil inventories. Too, the ISM non-manufacturing index will also be released after trading begins. In addition, some earnings reports are on the docket including Lennar Corp. (LEN) and Acuity Brands (AYI). These companies are expected to release before the opening bell.   - John E. Seibert III

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.

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Before The Bell - The stock market took off yesterday morning to start a new week, month, and quarter, following what was a stellar three-month span, which had seen the leading large-cap averages all make solid progress. The morning's catalyst was the news that Canada had joined the United States and Mexico in fashioning a replacement for NAFTA. That news sent the Dow Jones Industrial Average, which led the way early in the day and throughout the session, to a gain north of 280 points before noon. The other indexes also did well, at first, but lagged the blue chip composite.

The deal that Canada joined took at least some of the trade tensions from the financial arena, but still left China, a far more consequential player, to deal with. Trade discord has been one of the few issues that has given the bulls pause. Given the critical nature of trade and its potential to disrupt things, Wall Street's strong third quarter was all the more impressive. As we head into the final stanza, the equity market is holding very healthy nine-month gains. Expectations are that if earnings come in as strongly as forecast, the year likely would end on a decent note.

But this dramatic last-minute deal between the United States and Canada was not all Wall Street was celebrating yesterday. There also was uplifting news of a spinoff at Honeywell (HON), which sent that issue to a record high. Another stock flying high yesterday was Boeing (BAFree Boeing Stock Report), the aerospace and defense giant and Dow component, which is another beneficiary of a less-tension filled trade backdrop. Further, shares of former Dow issue General Electric (GE) jumped early in the day on news that the company had let its CEO go.

Meantime, in other news, the Institute for Supply Management issued its monthly reading on manufacturing activity yesterday morning, and it was another good one, although the ISM index did ease a bit in September from August. Specifically, the group's survey released a result for the latest month of 59.8. That was well above a neutral data reading of 50.0, but somewhat behind the August tally of 61.3. Breaking the index down, we see that new orders grew more slowly from the prior month, but production stepped up modestly, as did employment.

The bullish resolve then stiffened further into the early afternoon. But this was largely a Dow driven rally, as have a number of trade-related advances been in recent weeks. In fact, while the Dow continued to hold a roughly 200-point advance, the NASDAQ would turn lower as would the small-cap Russell 2000, which would really tumble into the close.  In all, as the session ended, the Dow would retain a 193-point gain, while the S&P 500 would end 11 points to the good. However, the NASDAQ would drop nine points, while the Russell 2000 would shed 24 points.

Breaking things down, we see that half of the top 10 equity sectors would close higher, while losing stocks held a four-to-three lead on gaining stocks. On the NASDAQ, the edge by losing issues would be almost two-to-one. So, all things considered, it was a mixed session, at best. Looking out on a new day now, we see that shares in Asia were generally lower overnight, while in Europe, the major bourses are following a downward path on concerns about Italy's banks. Stateside, Treasury note yields are off, while the U.S. equity futures are losing ground. – Harvey S. Katz, CFA

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.