BONDS RALLY, DOW HITS NEW HIGH: Here's what you need to know

The Dow Jones Industrial Average rallied for a seventh straight day on Tuesday, clinching another record closing high near 19,000.

The rout in the bond market finally paused as traders bought Treasurys, sending yields lower for the first time since last week’s election.

And, crude oil had its best day in seven months after Reuters reported that Saudi Energy Minister Khalid al-Falih is expected to travel to Qatar this week to meet officials from other OPEC countries on the sidelines of an energy forum. OPEC is expected to decide on production limits later this month.

First, the scoreboard:

  • Dow: 18,906.18, +37.49, (0.20%)
  • S&P 500: 2,178.89, +14.69, (0.68%)
  • Nasdaq: 5,275.82, +57.42, (1.10%)
  • 10-year Treasury yield: 2.238%, +0.016
  • WTI crude oil: $45.81, +2.49, (5.8%)
  1. Retail sales unexpectedly soared in September. Year-on-year, sales climbed 4.3% to a two-year high, and rose by 0.8% month-on-month. Excluding auto and gas sales which tend to be volatile, so-called core retail sales rose 0.6% (0.3% expected.) This report could bode well for a strong holiday shopping season. The Atlanta Fed’s GDPNow model raised its forecast for fourth-quarter growth to 3.3% from 3.1% after the report.
  2. Manufacturing in New York State improved more than expected in November. The Empire manufacturing index came in at 1.50, above economists’ expectations of -2.50. This was the first time the headline number pulled out of negative territory in four months.
  3. Home Depot beat on third-quarter profit and sales, and raised its full-year guidance. Higher traffic and more spending at stores boosted the No. 1 US home improvement chain. The company’s ales at established stores rose 5.5 per cent in the three months ended Oct. 30.
  4. The parent company of off-price retailer TJ Maxx reported better-than-expected same-store sales as its discounted offerings continued to draw customers. TJX Cos said comparable store sales rose 5 per cent in the third quarter, beating the forecast for 3.6% growth. The company has benefitted from a consumer shift towards stores with big bargains and away from mall-based chains.
  5. Republicans and Democrats have dramatically changed their views on the US economy since the election. Gallup’s Economic Confidence Index registered at -10 during polling done over November 1-7 — before the November 8 election — and then jumped to +3 for the post-election November 9-13 period. This was the first time the index was not in negative territory since March 2015. “The increase in economic confidence mostly stems from Republicans’ more positive views after Republican Donald Trump won the election,” Gallup said.


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