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Afternoon Note

Trade Tweet Moves Market

By Charles Payne, CEO & Principal Analyst
12/12/2019 1:50 PM

The markets turned around this morning after President Trump tweeted “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” The latest trade news suggest that the administration is prepared to hold off on the so-called December 15 tariffs, and may even consider reducing the existing tariffs on the $360 billion by as much as 50 percent.  The news sent the market higher, and while the highs have been cut in half, all the major indices are firmly in the green. 

The news on trade also sent Oil higher, and Energy is the best performing sector, up 1.66%.  WTI is up to $0.76 to $59.52 a barrel.  Oil demand has been depressed from the trade tensions, and latest optimism of a deal has lifted the market and the oil demand outlook.

Except for the safe haven sectors, the rest are all in the green.   Trade-sensitive stocks are performing well. Delta (DAL) is taking off and lifting the Transportations sector higher on its upbeat 2020 forecast.

Conversely, Boeing (BA) is down, and there is lots of news out on the company.  It does not appear that the 737 Max will be back in the air this year and it may be spring before it happens. In addition, China has raised concerns over the proposed changes to the MAX and its reliability and security.  Separately, Boeing and Southwest (LUV) have reached a settlement agreement.  The amount of the settlement was not disclosed.

S&P 500 Index

+0.35%

 

Communication Services (XLC)

+0.13%

 

Consumer Discretionary (XLY)

+0.48%

 

onsumer Staples (XLP)

 

-0.11%

Energy (XLE)

+1.66%

 

Financials (XLF)

+1.47%

 

Health Care (XLV)

+0.43%

 

Industrials (XLI)

+0.49%

 

Materials (XLB)

+0.81%

 

Real Estate (XLRE)

 

-1.30%

Technology (XLK)

+0.26%

 

Utilities (XLU)

 

-0.25%

 

New highs continue to outpace new lows.

On the NYSE:

-Advancing 1,793

-Declining 1,148

-New Highs 185

-New Lows 17

 

On the Nasdaq:

-Advancing 1,971

-Declining 1,143

-New Highs 291

-New Lows 50


 

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