Standard & Poors Reaches New High on Earnings and Trade Optimism

The Standard & Poors 500 Index touched on a record high on Monday, as the US-China trade relationship begins to strengthen.  

Specifically, the S&P rose 0.6 percent to close at 3,039.42, barely beating the previous record of 3,027.98 set on July 26.  This was accompanied by a 0.5 percent gain in the Dow Jones Industrial Average—up 132.66 points to 27,090.72—and a 1 percent climb in the Nasdaq Composite—to 8,325.99. 

Analysts, thus, are saying that these moves signal a strong message from the market:  all of the cyclical stocks are on the upswing; and are not only recovering but outperforming expectations.  All of this, of course, should motivate investors to be more optimistic in the days to come.  

This is important because average analyst sentiment has been negative for the quarter; or, at the very least, they have been concerned.  Many have expressed their worry over corporations underperforming, with technology likely not meeting their benchmarks.  However, upbeat reports from the likes of big industry players like Intel and Microsoft has helped to fuel market optimism, especially coming off of last week’s downbeat forecast from industrial stalwarts like Caterpillar, as well as major misses from financial institutions Goldman Sachs and Wells Fargo. 

All this in mind, analysts will continue to look at the week ahead to get a better vision of what we might expect from financial development. For one, some expect the Federal Reserve will finally initiate a rate cut but the highly anticipated US Labor Department jobs report will come out on Friday.  This report will provide much needed perspective on unemployment and hiring, as well as wages, and these are all closely watched as primary indicators of economic health in the United States.