S&P 500 Index – Overview Of The Market Response Following Trade Negotiations

Following the official statement from the White House that the U.S – China trade negotiations have gone exceptionally well, the optimism has already started to depict in the S&P 500 index. The index opened around 25 points higher at 2,963.07 level on Friday, October 11^th, 2019. The inclination for an upward rally is becoming evident with the index already hitting a high of 2,992.61 level. The market is currently trading at 2,986.72. The investors are now focused on President Trump’s meeting with Vice Premier Liu He in the White House later today.

Apple Inc. shares were reported at an all-time high of $234.97 earlier in the day, playing a significant role in re-energizing the S&P 500 and Nasdaq indices. SPLRCT (technology sector) was also highlighted to have performed the best in the past five weeks.

The prospect for an interim deal that may postpone the plans of the U.S to impose increased tariffs on China has pushed the S&P 500 index closer to breaking a losing streak that has spanned over three weeks. The index is currently challenging the strong resistance located at 3,000 level. In an event that it manages to break this resistance, an intermediate-term bullish trend will be established in the market.

Consumer Staples, Real Estate, And Industrial Sector Showing Significant Gains

In the industrial sector (SPLRCI), Fastenal Co. showed the best response with a daily gain of 17.2% that surged SPLRCI at large by 2.2%. On the other hand, real estate stocks (SPLRCR) and consumer staples (SPLRCS) were also reported to have gained strength. Such gains, however, were significantly smaller as compared to the technology or industrial sector.

The only sector that has failed to respond optimally to the recent positive developments in the U.S – China trade war, is the defensive utilities (SPLRCU). All in all, S&P 500 index has presented 26 stocks making 52-week highs while none have been reported to have made a new low.

S&P 500 Index Year-On-Year Earnings Dropped By 3.2%

According to the Refinitiv’s IBES data, however, the year-on-year earnings for the S&P 500 index have still experienced a significant drop of 3.2%. Since 2016, it has been reported as the first decline in SPX in terms of year-on-year earnings.

The financial analysts have further added that Newmont Goldcorp has come out as the worst performer on the S&P 500 index with a daily loss of 2.5% following President Trump’s statement. WEC Energy and W.W. Grainger, on the other hand, have been recommended as the stocks of interest for the investors with 1.8% and 6.5% gain for the day respectively. There are speculations of further gains for these businesses later in the day.