Market Roundup: Indices Move Up Despite Shutdown and Trade Talks

Published: Jan. 21, 2019, 2:23 p.m.

Markets opened the week lower after weak Chinese economic data and the U.S government shutdown reached its 24th day on Trump’s quest for tighter border security. Exports for China fell 4.4%, while imports fell 7.6% in December, which are likely to pressure China into finalizing a deal on trade. The following day the major indices notched their first day of gains in three sessions led higher by Technology shares. The S&P 500 added 1.1%, as shares of Tech and Communications Services companies in the broad index gained more than 1% each. The NASDAQ Composite rose 1.7%, and the Dow Jones Industrial Average, 0.7%. Internationally, China’s central bank pledged to cut taxes, increase spending, and provide financing to businesses to help spur the economy, while European stocks had a volatile session following Parliament’s vote, which rejected Prime Minister Theresa May’s deal to exit the European Union. Midweek, the market finished higher as Financial stocks earnings provided a boost. The Dow led the way improving 0.59%, while the NASDAQ gained 0.15%. The S&P 500 gained 0.22% with Financials leading and Consumer Staples lagging the most. Stocks rallied late Thursday following a Wall Street Journal report suggesting that U.S. trade officials were debating pairing back tariffs on Chinese imports to help calm markets. Tariff-sensitive sectors jumped on the report leading all three major indices to close higher on the day. Meanwhile, investors continued to keep a close eye on fourth quarter earnings season. While just 11.6% of S&P 500 companies have reported so far, earnings are beating by 2.1% with 73% of the reporting companies exceeding their bottom-line estimates. The week ended with the U.S government shutdown reaching its 28th day. Unsurprisingly, Consumer Sentiment took a dip and fell the most since 2012. On the other hand, Industrial Production numbers came in strong as Mining and Automobile numbers were stronger than expected for December. Markets finished higher for the day and capped off an impressive week despite the uncertainty around the government shutdown and ongoing trade talks with China.