The Week In Review
The major averages inched into the green to notch fresh record closing highs today, as Wall Street capped off a week in which trade optimism sparked a massive rotation out of bonds and into equities.
The S&P 500 gained 0.25% to 3,093, led by gains in the tech and health care sectors. The Dow Jones Industrial Average climbed 6 points to 27,681 led by Disney shares. The Nasdaq Composite advanced 0.5% to 8,475. For the week, the S&P 500 rose for a fifth straight week, gaining 0.9%. The Nasdaq rose 1.1%, extending its weekly winning streak to six. The Dow posted a three-week winning streak, advancing 1.2%.
Corporate earnings continue to come in better than expected. Walt Disney led the Dow up 3.8% beating earnings estimates ahead of the launch of Disney + next week. Disney helped the S&P 500 communication services sector rise 0.4% today. Of the 452 S&P 500 companies that have reported thus far, 74% have beaten estimates.
Sentiment was boosted this week from optimism surrounding a trade deal with China. A spokesperson for the Chinese Commerce Ministry said Thursday that China and the U.S. had agreed to cancel existing tariffs in phases. A U.S. official also reportedly said both sides agreed to roll back the levies in tranches. The trade-sensitive Philadelphia Semiconductor Index rose 0.5%. Qualcomm rose 4% after rising 7% yesterday following earnings and ab upbeat forecast for 2020 ahead of the 5G rollout.
The risk-on sentiment and improving tone around trade took a big bite out bonds. The U.S. 10-year Treasury yield jumped more than 15 basis points at one point on Thursday, its biggest upward move since the 2016 election. The 10-year rate hovered around 1.92% on Friday after starting the week near 1.75%. Yields move inversely to prices.