Want to know why the Dow Jones Industrial Average is doing what it's doing? Check back here for a semi-live look at the volatile markets from Barron's reporters.
4:35 p.m. Ouch. After spending much of the day with a 200-plus point gain, the Dow Jones Industrial Average finished up just 55.36 points, or 0.2%, at 24,5509.52. The S&P 500 rose 0.1% to 2718.37, while the Nasdaq Composite advanced 0.1% to 7510.30.
It would be nice to blame General Motors' (GM) announcement that it would have to shrink the company in the U.S. due tariffs, but that news broke around 1:35 p.m. and no one seemed to mind just then. For now, we'll chalk it up to end of quarter selling.
Dow Heads Into the Home Stretch With 200 Point Gain
But then there was a big reversal after the Trump administration said it would rely on existing tools to restrict Chinese investment in U.S. technology sector, helping the markets bounce back.
And the good feelings have lasted through today. The Dow Jones Industrial Average is trading at 24,429.10 after gaining 213.05 points, or 0.9%, while the S&P 500 has risen 0.6% to 2734.04 and the Nasdaq Composite has advanced 0.6% to 7546.24.
Brad McMillan, chief investment officer, Commonwealth Financial believes the rest of the year for stock markets could be quite exciting, in both a positive and a negative sense, but with the positive winning out. "I expect the U.S. equity markets to end the year with moderate appreciation from levels at the end of December-around 3,000 for the S&P 500 as a base case." He expects on a relative basis, earnings growth should continue to improve on the heels of tax reform and economic expansion. - Varada Bhat
It's a Good Day When the Dow Climbs 252 Points. The Next 10 Years Could Be Tough.
1:13 p.m. The last trading day of this quarter is looking good so far. The Dow Jones Industrial Average has gained 252.59 points, or 1%, to 24,468.64, while the S&P 500 has risen 0.8% to 2738.53 and the Nasdaq Composite has advanced 0.6% to 7547.39.
Financials are one of the best performers today after most big banks passed the Fed's stress test yesterday. The Financial Select Sector SPDR ETF (XLF) gained 1.1% today after dropping for 13 straight days and hitting an important support level. Wells Fargo (WFC) climbed 4.7% midday, while Citigroup (C) added 1.4% and JPMorgan Chase (JPM) is up 0.8%.
As we've passed half of the year, market valuation, at least on one metric, has gotten stretched. The cyclically adjusted price-to-earnings ratio for the S&P 500- commonly called the Shiller P/E ratio -stands at 32. That's the highest level in the history besides 1929 and the late 1990s, according to Russell Investments' mid-year outlook report. Russell expects the total return of U.S. equities over the next decade to be very subdued-only about 2% per year.
We are now in the second-longest economic expansion in records dating back to the 1800s. Although solid corporate fundamentals suggest there is still room to run, it's time to start watching out for the inflection point of the cycle. - Evie Liu
Dow Climbs 244 Points as Nike Just Does It
10:26 a.m. It's a beautiful summer Friday in New York and U.S. markets are appropriately sunny in early trading this morning. The Dow Jones Industrial Average has advanced 243.85 points, or 1.01%, to 24,459.90, while the S&P 500 has gained 0.75% to 2,736.61, and the Nasdaq Composite has increased 0.74%, to 7,559.45.
Nike (NKE)- up 12.2% and at an all-time high of $80.38 -is powering the Dow upward following reporting better-than-expected earnings, in addition to a new $15 billion share repurchase program, after Thursday's close. If the S&P 500 can hold its gains through the rest of the day it will be just the second trading day of the last 17 that it rises more than half a percentage point, joining yesterday.
Counter to yesterday's trend, however, Energy is the leading sector in the S&P today after being Thursday's biggest loser. Crude Oil has gained 1.3% today, to $74.24 a barrel - its highest level since the fall of 2014 - while the Energy Select Sector SPDR ETF (XLE) is up 1.4% this morning.
U.S. markets' gain might be Chinese markets' pain, as Ivan Feinseth, chief market strategist of Tigress Financial Intelligence, explains:
The ongoing weakness in China's stock market is starting to give way to the belief that Pres. Trump's hard-line stance on trade tariffs may be working. The Shanghai Stock Exchange Composite Index made a new five-year low closing at 2,816.57, which is now down over 21.5% from its high of 3,587 reached on January 29th of this year. In comparison, the S&P 500 is only down 5.4% from its all-time high of 2,872.87 reached on January 26th. Both stock markets sold off simultaneously when Pres. Trump first announced his initial tariffs on imported aluminum and steel from China. As Pres. Trump continues to ratchet up his rhetoric in the belief that China has more to lose because of the significant amount of goods that the U.S. imports from China versus how much China imports from the U.S., he believes that China will blink first. The damage that's been done to the Chinese stock market which is four times the selloff in the U.S. stock market may be the catalyst that opens China up to negotiations and softens its recently indicated hard-line stance.
That decrease for the Shanghai Composite Index has only accelerated in recent weeks, with nearly half of its 2018 losses coming in June alone. It has been the sixth losing month of the last eight for the index. - Nicholas Jasinski
Dow Gains 100 Points as Banks Bounce, Nike Soars
7:46 a.m. It's a Friday full of good news, and that has the market heading higher this morning. S&P 500 futures have advanced 0.4%, while Dow Jones Industrial Average futures have risen 102 points, or 0.4%. Nasdaq Composite futures have gained 0.4%.
What's the good news? How about:
• The Europe Union reached a deal on migration that takes pressure off of German Chancellor Angela Merkel, at least for now.
• The European Central Bank is said to be considering ways to keep borrowing costs low even as it plans to end its bond-buying program later this year.
Of course it's not all good news. President Trump is said to be considering whether to withdraw the U.S. from the World Trade Organization, which--and I'm going out on a limb here--would not be well received by the markets.
But maybe that's tomorrow's news? - Ben Levisohn
Sign up to Review & Preview, a new daily email from Barron's. Every evening we'll review the news that moved markets during the day and look ahead to what it means for your portfolio in the morning.