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Stock Market News for Dec 11, 2019

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U.S. stocks closed lower on Tuesday amid investors’ concern over a partial trade deal as the dateline for fresh U.S. tariff on China will end by this week end. Moreover, market participants are waiting for the Fed Chair’s FOMC statement to be delivered on Wednesday afternoon. All three major stock indexes finished in the red.

The Dow Jones Industrial Average (DJI) lost 0.1% to close at 27,881.72. The S&P 500 decreased 0.1% to close at 3,132.52. Meanwhile, the Nasdaq Composite Index closed at 8,616.18, shedding 0.1%. The fear-gauge CBOE Volatility Index (VIX) increased 0.7% to close at 15.79. A total of 6.3 billion shares were traded Tuesday, lower than the last 20-session average of 6.7 billion. Decliners outnumbered advancers on the NYSE 1.02-to-1 ratio. On Nasdaq, a 1.09-to-1 ratio favored advancing issues.   

How Did The Benchmarks Perform?

The Dow closed in negative territory with 15 components of the 30-stock blue-chip index closing in the green while 15 ended in red. Within the Dow, 3M Co. MMM with a Zacks Rank of #3 (Hold) dropped 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The tech-laden Nasdaq Composite also ended in the negative territory due to weak performance of tech stocks, especially semiconductor stocks. The S&P 500 also finished in the red. The Real Estate Select Sector SPDR (XLRE) lost 0.7%. Notably, seven out of 11 sectors of the benchmark index closed in the red while four finished in the green.

Uncertainty Over Partial Trade Deal

On Dec 10, Bloomberg reported that Chinese authority is expecting President Trump to postpone fresh tariffs on the Asian economic giant in order to provide more time so that both sides can reach to an interim deal to resolve trade-related disputes. However, no confirmation has been given by White House. 

Acting White House chief of staff Mick Mulvaney said that additional tariffs of 15% on $156 billion goods from China are “still on the table” and could set in on Dec. 15, even as progress toward an interim trade deal is being made. President Donald Trump’s economic adviser Larry Kudlow also reiterated that new tariffs are “still on the table.”

Moreover, The South China Morning Post reported citing a source close to the trade negotiation that “it is growing increasingly unlikely that a U.S.-China trade deal will be completed this week.”

USMCA Trade Deal

On Dec 10,House Speaker Nancy Pelosi confirmed that Democrats will support President Donald Trump’s decision to introduce a new United states-Mexico-Canada trade deal that will substitute the old NAFTA (North American Free Trade Agreement). The Democrats have agreed to sign he UCMCA deal after President Trump made several changes in the original bill with respect to labor and environmental standards.

FOMC Meeting In Focus

The last FOMC meeting of the Fed will be completed on Wednesday. The Fed Chair Jerome Powell will deliver a lecture on the meeting’s outcome at 2 PM EST. While almost all respondents are expecting the Fed to maintain a status quo with respect to the benchmark interest rate, market participants will close watch Fed’s view about the U.S. economic condition, expectation on inflation and future fund rates.

Economic Data

The NFIB Small Business Optimism Index came in at 104.7 in November compared with 102.4 in October, reflecting its largest monthly gain since May 2018. Notably,seven of the 10 components in the index advanced in November.

No-farm productivity declined 0.2% in the third-quarter 2019 compared with a decline of 0.3% in the second quarter. However, the consensus estimate was for a decline of 0.1%. Unit labor cost rose 2.5% in the third-quarter 2019 compared with 3.6% in the prior quarter. The consensus estimate was for an increase of 3.3%.

Stocks That Made Headline

Enbridge Hikes 2020 Dividend, Expects Y/Y Higher EBITDA, DCF

Enbridge Inc. ENB recently received authorization from the board of directors to hike quarterly dividend for 2020. (Read More)

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Chevron Corp. CVX recently announced its capital and exploratory spending program for 2020. (Read More)

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