As the holiday season washed out and traders began to return from their vacations, one of the first “regular” weeks of trading in 2019 was ruled by optimism. Here’s how it panned out.
SPY began in climb out on Monday, starting off $256.86. Worries over global economic growth and trade plagued some of the foreign markets. US stocks fared well, however, reached the min-258’s in the afternoon and drifted slightly downward on profit taking before closing in the mid-257’s.
News and earnings fueled the gains on Tuesday. SPY jumped upward out of the morning bell as traders learned that China would provide stimulus to its slowing economy. As a major trading partner with the US, a healthy Chinese economy is important to the US markets and investors reacted positively when they heard that news. Strong earnings from the healthcare and banking sectors, as well as Netflix’ announcement that it would raise subscription prices carried the upward momentum through the day.
SPY continued its climb on Wednesday as giants Goldman Sachs and Bank of America reported strong earnings and saw their best performing days in many years. Ongoing trouble in the UK over the terms of the Brexit deal did not have a noticeable impact on SPY, but invertors began grumbling about a dark cloud forming over the March 29th departure from the European Union. SPY finished the day slightly higher in the upper-260’s.
The US-China trade dispute was back in the news on Thursday, as the Wall Street Journal reported that that the US may reduce tariffs on Chinese imports in an attempt convince Chinese leaders to implement reforms as part of the ongoing trade dispute negotiations. SPY jumped quickly when this news was released in the afternoon, on a day that had already seen significant growth as tech and industrial companies led the gains. SPY climbed almost $3 through the day.
Friday’s trading was exciting! Many of us in the Trading Room made money with puts as SPY fell in the first few minutes of the trading day. Those losses were short-lived. Reports of a speech by FOMC member Williams, echoing the position of Fed Chair Powell and other FOMC members, calling for patience and good judgement before raising interest rates bolstered the turn-around and helped SPY end the week on a high note in the mid-266’s.