The S&P 500 rose 0.88% and the Dow was higher by 0.44%. This was the largest rally since August 1st and leaves the indices flat for the week and down 1.8% for the month to date.
Trading slowed to a crawl a little after noon eastern when the NASDAQ was halted. Flash PMI data released prior to the open set a positive tone to the opening of trading this morning. China’s August numbers were much better than expected and Europe posted strong numbers also. Prior to the NASDAQ development, trading volumes remained very subdued. Market participation remains very low ahead of the upcoming Labor Day holiday.
Commodities were a mixed bag today. Copper rose 0.63% largely due to the good news from China. Gold rose 0.65% and silver was higher by 0.99%. Crude rose 1.28% and natural gas moved up by 2.2%.
The FHFA house price index increased 0.7% in June. The combination of limited inventory and strengthening sales put upward pressure on the index. Recent price appreciation has been widespread across all regions.
Financials gained 1%. The bank index led the way higher with an increase of 1.45%. Insurance stocks rallied from a recent selloff posting a 1% gain. There has been very little news associated with the sector during its recent decline. There was acknowledgement from analysts today that rising rates will increase the net interest margin that banks earn.
Positive data from Europe and China overnight had industrial stocks moving higher today. China’s PMI rose from 47.7 to 50.0 and things continue to improve in Europe. There was very little in the way of news regarding specific companies today. Industrials gained 1.25% led by multi-line names. Capital equipment stocks were in favor on anticipation that the positive news from China will lead to increased sales ahead.
The transports roared ahead by 2% today. The group came under pressure after the proposed merger in the airline industry was put on hold. The space reacted favorably to the news from abroad. The transport index traded down to its 50-day moving average the last few days and aggressively moved above that level today.
Energy stocks gained 1.50% with natural gas and crude both trading up nicely. This is another area that benefitted from the positive macro news coming from abroad.
Consumer discretionary stocks outperformed the staples. Several restaurant stocks continue to move higher. Retail was a mixed bag. Several specialty retailers were off substantially on weak numbers. Gamestop rose 9% after they reported better than expected numbers.
Source: PFS Group
