It’s become gospel that technology is the most important sector of the U.S. stock market; after all, tech stocks have the largest weighting in the S&P 500 (~26%), and the sector outperformed all others over the last year (+26%).
A busy week gets underway and amidst trade tensions, earnings, geopolitics and the July jobs report, the Federal Reserve is still the biggest voice in the room; U.S. and China trade heats up again this week with the White House expected to impose the second wave, $16 billion on Chinese goods, on Wednesday.
We are coming to the next phase of the divergence. I woke up this morning, turned on the box and first commentator I saw said we’ve started the next leg up in the bull market. Some of these people take it for granted the market is going up again. Has anyone noticed the Dow and SPX peaked in January?
Apple has a big say in where Nasdaq goes as the largest piece of index comprising 7.3%. The technology behemoth is up 11% year-to-date, 25% over the last 12 months and sports a dividend yield of 1.5%. Earnings have been mostly higher with gains in three of the last four quarters. The stock began a sharp rally at the end of April, which pushed it $25 higher (15%) during the following four weeks.
It was all about the FOMC Rate Decision release on Wednesday, and stocks' initial reaction to that news was slightly negative. The broad stock market extended its short-term consolidation along the resistance level. Will the uptrend continue or is this some topping pattern ahead of downward reversal? There are still two possible medium-term scenarios.
E.S.C. Coppock introduced the indicator in Barron’s in October 1965. The goal of this indicator is to identify long-term buying opportunities in the S&P 500 and Dow Jones Industrial Index. The signal is very simple. Coppock used monthly data to identify buying opportunities when the indicator moved from negative territory to positive territory.
The final trading day of April kicked off with a positive mood in Asia after North Korea’s Kim Jong-un made history by crossing into South Korea. The scene of Kim Jong-un shaking hands with Moon Jae-in brought cheer to financial markets as the two leaders vowed to work towards denuclearizing the Korean peninsula, hopefully ending a seven-decade conflict.