Dow jumped up 108, advancers only slightly ahead of decliners & NAZ gained 42. The MLP index was about even in the 218s & the REIT index fell 2+ to the 402s following a rally last year. Junk bond funds crawled higher & Treasuries were purchased. Oil slid lower, going under 61, & gold & gold rose 9 to 1532.
AMJ (Alerian MLP Index tracking fund)
The number of Americans filing claims for jobless benefits edged lower last week, a positive signal for the US labor market amid recent signs that new claims may be trending slightly higher. Initial claims for state unemployment benefits decreased 2K to a seasonally adjusted 222K last week, the Labor Dept said. The forecast called for 225K new claims last week. While claims have been volatile in recent weeks around the holiday season & end of the year, longer-term averages point to a slight increase in new claims. The 4-week moving average of initial claims rose by 4K to 233K, the highest level since last Jan.
European stocks started the new year with a rally as trade optimism continued & China's central bank gave markets a boost. The Stoxx 600 jumped 1%, along with the FTSE 100 also up1%, while the French CAC climbed 1.4% in early trading. The German DAX gained 1.1% & Italy's FTSE MIB rose 1.4% on the first day's trading of 2020. US stocks followed higher, with the Dow up.0.4%, the S&P 500 rose 0.2% & the NAZ rose 0.5% after the open. After a strong end to 2019 followed by the New Year's holiday, renewed optimism over a US-China trade deal helped propel European stocks higher on the first day of 2020 trading. Pres Trump also plans to visit Beijing to begin talks on a ‘phase 2’ deal, while ‘phase 1’ will be signed in a White House ceremony on Jan 15. China's central bank added to the feel-good factor, announcing today it would cut the amount of money banks will be required to have on hand from Mon - in a bid to boost the slowing economy. The reserve requirement ratio will be cut 50 basis points, which is expected to release about 800B yuan ($115B) into the economy.
‘First five days’ indicator, which has a good track record at predicting year, off to good start
While there is a small amount of selling in the 2nd hour of trading & a weak advance-decline line, the bulls remain in command of the stock market. The ceremonial signing of phase 1 of the big China trade deal is what investors like to see. Investors are very optimistic & have 30K Dow in their sights. However demand for safe haven gold & Treasuries continues to be strong.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 61.22 | +0.16 | +0.3% |
| GC=F | Gold | 1,529.60 | +6.50 | +0.4% |
The number of Americans filing claims for jobless benefits edged lower last week, a positive signal for the US labor market amid recent signs that new claims may be trending slightly higher. Initial claims for state unemployment benefits decreased 2K to a seasonally adjusted 222K last week, the Labor Dept said. The forecast called for 225K new claims last week. While claims have been volatile in recent weeks around the holiday season & end of the year, longer-term averages point to a slight increase in new claims. The 4-week moving average of initial claims rose by 4K to 233K, the highest level since last Jan.
Jobless claims edge lower during week around Christmas
European stocks started the new year with a rally as trade optimism continued & China's central bank gave markets a boost. The Stoxx 600 jumped 1%, along with the FTSE 100 also up1%, while the French CAC climbed 1.4% in early trading. The German DAX gained 1.1% & Italy's FTSE MIB rose 1.4% on the first day's trading of 2020. US stocks followed higher, with the Dow up.0.4%, the S&P 500 rose 0.2% & the NAZ rose 0.5% after the open. After a strong end to 2019 followed by the New Year's holiday, renewed optimism over a US-China trade deal helped propel European stocks higher on the first day of 2020 trading. Pres Trump also plans to visit Beijing to begin talks on a ‘phase 2’ deal, while ‘phase 1’ will be signed in a White House ceremony on Jan 15. China's central bank added to the feel-good factor, announcing today it would cut the amount of money banks will be required to have on hand from Mon - in a bid to boost the slowing economy. The reserve requirement ratio will be cut 50 basis points, which is expected to release about 800B yuan ($115B) into the economy.
European stocks enjoy new year rally on trade deal optimism and Chinese stimulus
Stocks jumped to a record on the first trading day
of 2020, & if the rally extends to the next 4 sessions, the market
could be in for another good year going by an old stock market
indicator. The market's performance in the first 5 days
of a given year can sometimes predict the market's direction for the
rest of the year, according to the Stock Trader’s Almanac, which studied
the “first five days” phenomena going back to 1950. When stocks finish
that period higher, the S&P 500 has been positive 82% of the time at year-end with an average gain of
13.6%, according to calculations. Still a lot can happen the rest of the year, especially with an
election ahead. And the indicator's predictive ability could just be
coincidental given that stocks rise most years. That said, this is a time when big investors make their initial bets for the new year & could reveal their bias for the year. It
turned out to be accurate in 2019 when the S&P 500 rebounded from
the worst Dec since the financial crisis 10 years ago, rising 2.7% in the first 5 trading days. The benchmark ended the year 28.9% higher, posting
its best year since 2013. The market is now in the tail end of the Santa Clause rally period,
which historically has given stocks a boost. During the final 5
trading days of the year & the first 2 of the new year, the S&P
500 has posted a 1.3% gain on average since 1950. Jan also features one of investor's favorite seasonal gauges — the Jan barometer.
A higher Jan should mean a higher year, which is the thinking
behind saying: “So goes January, so goes the year.”
‘First five days’ indicator, which has a good track record at predicting year, off to good start
While there is a small amount of selling in the 2nd hour of trading & a weak advance-decline line, the bulls remain in command of the stock market. The ceremonial signing of phase 1 of the big China trade deal is what investors like to see. Investors are very optimistic & have 30K Dow in their sights. However demand for safe haven gold & Treasuries continues to be strong.
Dow Jones Industrials
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