After The Close - The futures market was up strongly ahead of the session, as news broke overnight that the United States and China had agreed to meet in Washington next month for another round of trade negotiations. This positive price movement continued through the opening bell, and the Dow Jones Industrial Average found itself higher by as many as 480 points in the early portion of the trading session. The other indices were higher in tandem. The markets trended sideways for much of the day, but did give back a portion of the day’s gains at the close. All told, the Dow closed higher by 373 points, the S&P 500 was up 38 points, and the NASDAQ increased 140 points.

Moreover, market breadth was positive, as advancers outpaced decliners by a 2.1-to-1.0 ratio. Financial and technology stocks were among the best performers on the day, aided by higher interest rates and better sentiment for global trade, respectively. However, the REITs and utility equities were among the worst performers today, hurt by a rise in interest rates.

In commodity news, oil prices were higher today, as demand expectations rose thanks to improving global trade sentiment. Meantime, U.S. Treasury bond yields climbed, as traders moved out of the safe-haven asset. The yield curve steepened a bit, as longer-term interest rates were up more than those on the short end. The VIX Volatility Index was lower today, as demand for options protection fell a bit.

Looking ahead, tomorrow will see economic data released, including the August nonfarm payrolls, and the unemployment rate. This report will provide insight into how the job market is doing, and the outcome may give some insight into future U.S. Federal Reserve interest-rate policy. The docket for earnings results is slated to be quite barren, though. This fact suggests that trading tomorrow will be guided by any news that breaks concerning the U.S. and China trade talks, as well as the jobs release.  - John E. Seibert III

At the time of this article's writing, the author did not have positions in any of the companies mentioned.    


11:20 AM EDT - After a selloff on Tuesday and a rebound yesterday, the stock market really took off this morning, with the bulls fully in charge. What sparked the big jump in prices, which has seen the Dow Jones Industrial Average soar by nearly 500 points at its best levels of the morning thus far, was the news that the United States and China had agreed to trade talks next month.

In addition to that news, there also was the release of a private-sector payroll report showing that 195,000 new jobs were added last month; expectations had been for an increase of 140,000 new payrolls. Further the Institute for Supply Management reported that non-manufacturing activity had strengthened last month, reaching a tally of 56.4. The July figure was 53.7.

As to the market, as we closed in on two hours of trading, the Dow was still up 440 points; the S&P 500 was ahead 41 points; and the NASDAQ was better by 140 points. There was virtually no place for the forlorn bears to hide as the often difficult month of September continued to roll along.  -  Harvey S. Katz, CFA

At the time of this article's writing, the author did not have positions in any of the companies mentioned.   


Before The Bell - The rollercoaster ride continues on Wall Street. First, it was the imposition of new tariffs by the United States and China on Tuesday that sent the bulls scurrying for cover, in the process sending the Dow Jones Industrial Average down by 285 points to start the holiday shortened week. Then, yesterday, with the new tariffs not in the headlines, but a lessening in tensions in strife-torn Hong Kong in the news, stocks surged at the open, with the blue chip composite soaring by more than 220 points. That advance came even as news also was issued showing that our trade deficit with China had increased in July.

As to the situation in Hong Kong, stocks rose as tensions there eased between the government and protesters after the withdrawal of a controversial bill. Stock market sentiment also was boosted after the New York Federal Reserve President John Williams, again reinforced the belief that the central bank will, act as needed to ensure that the long-running business expansion will remain in place. But he warned that low inflation was a major problem, even larger than any expectation of a slowing economy. That sense also likely led former Fed Chair Alan Greenspan to say that negative interest rates could be ahead for the United States.

Meanwhile, after that initial buying burst, the market remained in higher ground as we moved toward the noon hour in New York. The tech stocks, including the semiconductor manufacturers were especially strong. But it was not a tide that was lifting all boats, as shares of the iconic coffee maker Starbucks (SBUX) fell in early trading on a lesser outlook from the company. Still, such setbacks were not the rule on this morning of strongly higher prices. Indeed, with the lessening in international tensions, stocks would continue on their run higher as the morning concluded and the afternoon got under way.

In fact, the Dow soon would again cross the 200-point advance line on this continuing optimism. In other news, the stock market was further underpinned by diminishing fears of a global slowdown following the release of solid economic metrics out of China. On point, a new survey showed that activity in China's services sector had expanded at its fastest pace in three months in August. That good news helped to counter fears of a prolonged slump in the world's second largest economy. This upbeat tone, moreover, was not lessened by the 2:00 PM (EDT) issuance of the Federal Reserve Beige Book.

The Beige Book showed that reports from the Fed Districts described an economy that was generally growing at a modest pace over the summer. That issuance was not a problem for Wall Street, apparently, and stocks retained their strong mid-session advance as the afternoon wound down to finish with a solid advance. In all, the Dow added 237 points; the S&P 500 was 32 points better; and the NASDAQ, with a late push, gained 102 points. In all, the setback on Tuesday was at least matched, save for the Dow, in the session yesterday. Now, with data on non-manufacturing activity today and jobs tomorrow, new tests will lie ahead.

Looking at the penultimate session of the week, we see that stocks were mostly higher in Asia overnight, while in Europe, the leading bourses are showing early Thursday gains. At the same time, oil prices are edging upward; U.S. Treasury note yields are climbing on optimism about a resumption of trade talks with China; and gold prices are down. Finally, ahead of some key economic data today and tomorrow, the U.S. equity futures are pointing to a strong opening when trading resumes this morning. – Harvey S. Katz, CFA

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.