Fundamental Analysis

Wall Street Rises On Trade Hopes; Boeing Keeps Gains In Check

Wall Street rose on Monday on signs of progress in resolving the prolonged U.S.-China trade war, while a second straight session of declines for Boeing pressured the blue-chip Dow index.

White House adviser Larry Kudlow said tariffs scheduled for December could be withdrawn if talks go well, adding to optimism after China said it will work with the United States to address each other’s core concerns.

Trade-sensitive technology stocks .SPLRCT gained 0.8%, while the Philadelphia Semiconductor index .SOX climbed 1.6% on gains in U.S. chipmakers with a large exposure to China.

“It is a bit more confirmation from China as to what was agreed with the U.S. in discussions toward the stage one trade deal” said Jon Adams, investment strategist at BMO Global Asset Management.

A 1.2% gain in financial stocks .SPSY also propped up the S&P 500 index .SPX. Big banks posted largely upbeat quarterly results last week in a strong start to the earnings season.

“The earnings estimates are too low this year for both Q3 and Q4. We should be able to surprise on the upside and we are seeing that in early stages of Q3,” Adams added.

Shares of Boeing Co (BA.N) were on track for their worst two-day fall in over a decade as multiple brokerages downgraded the stock following reports that call into question the timing of the grounded 737 MAX jet’s return to service.

The planemaker maker’s shares fell 3.4%.

Signs of progress in trade talks have helped Wall Street recover from a rough start to the month. The benchmark S&P 500 index ended Friday with its second weekly gain, while the Nasdaq rose for the third week in a row.

At 11:09 a.m. ET, the Dow Jones Industrial Average .DJI was up 32.84 points, or 0.12%, at 26,803.04, the S&P 500 .SPX was up 15.58 points, or 0.52%, at 3,001.78. The Nasdaq Composite .IXIC was up 59.37 points, or 0.73%, at 8,148.91.

Investors are now gearing up for earnings reports this week from high-profile companies including Boeing, Microsoft Corp (MSFT.O), Procter & Gamble Co (PG.N), United Parcel Service Inc (UPS.N) and Caterpillar Inc (CAT.N).

Analysts have projected the first earnings contraction since 2016 for S&P 500 companies, but of the 75 companies that have reported results so far, only 12% have come in below estimates, according to Refinitiv data.

Halliburton Co (HAL.N) gained 6.3%, reversing earlier losses, after the oilfield services provider detailed plans of further cost reductions.

Coty Inc (COTY.N) was the biggest gainer among S&P 500 companies after the cosmetics maker said it was planning to sell its professional beauty business that houses brands such as Wella and OPI.

Cardinal Health Inc (CAH.N), McKesson Corp (MCK.N) and AmerisourceBergen Corp (ABC.N) led declines on the benchmark index.

The drug distributors, along with Teva Pharmaceutical Industries (TEVA.TA), reached a settlement with two Ohio counties related to the opioid crisis.

Advancing issues outnumbered decliners by a 2.50-to-1 ratio on the NYSE and by a 2.53-to-1 ratio on the Nasdaq.

The S&P index recorded 35 new 52-week highs and two new lows, while the Nasdaq recorded 76 new highs and 39 new lows.

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Vladimir Ribakov

Following 11+ years of trading experience, trading my own accounts as well as for hedge funds and brokerages, I have decided to fulfill my destiny and to personally mentor Forex and Commodities traders. When I released the “Broker Nightmare” (software that hides trades from brokers) 8 years ago, I found an overwhelming number of frustrated people who genuinely wanted to learn how to trade the Forex market, but instead found themselves scammed and misled. Over the years I have also release other trading systems based on my trading strategies, and met a lot of people on my worldwide Forex seminars. We’ve formed a close Forex community and we meet once or twice a year in various locations in Europe.

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