U.S. markets were in rally mode from the start of Friday’s open and maintained momentum throughout the session in hopes of a good outcome in the trade talks between U.S. and Chinese representatives. Tweets from President Trump confirmed that the U.S. had reached what is being called a phase 1 deal with China that will be put into writing and signed.
The deal covers intellectual property, financial services and $40-$50 billion in agricultural goods purchase. Additionally, Treasury Steve Mnuchin confirmed that the tariff hike that was threatened for next week will not go forward now that a deal has been reached. The gains help snapped a 3-week losing streak for the overall market with the major indexes now in positive territory for the month, aside from the small-caps.
The Russell 2000 rallied 1.8% following the intraday push to 1,525 and close back above the 1,500 level. Prior and lower resistance at 1,515-1,530 and the 50-day moving average was tripped but held with a close above the latter and the 200-day moving average being an ongoing bullish signal.
The Nasdaq zoomed 1.3% after testing an afternoon high of 8,115 and easily closing back above its 50-day moving average. Prior and lower resistance at 8,100-8,150 was breached but held with a move above the latter getting 8,200-8,250 in play. The September highs tapped 8,243 and 8,237 and were a week apart.
The Dow surged 1.2% after trading to a 2nd half high of 27,013. Current and lower resistance at 26,800-27,000 was cleared and held with a close above the latter signaling additional strength towards 27,250-27,500 and the July all-time peak at 27,398.
The S&P 500 soared 1.1% following the intraday day push to 2,993. Lower resistance from early September at 2,975-3,000 was cleared but held with a close above the latter getting 3,025-3,050 and fresh all-time highs back in focus.
For the week, the S&P 500 and the Nasdaq added 0.9% while the Dow rose 0.6%. The Russell 2000 gained 0.7%.
Materials and Industrial were the strongest sectors after jumping 1.9% while Technology and Energy rose 1.4%. Utilities and Real Estate were the weakest sectors after giving back 0.4% and 0.3%, respectively.
For the week, the best performing sectors were Materials (1.9%), Industrials (1.6%), Technology (1.3%) and Consumer Discretionary (1.2%). Utilities (-1.3%) and Consumer Staples (0.9%) were the weakest.
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Hexo (HEXO) upgraded to Hold from Underperform at JefferiesUSA Technologies (USAT) upgraded to Buy from Hold at Lake StreetWorkday (WDAY) upgraded to Buy from Neutral at Goldman Sachs
Canopy Growth (CGC) downgraded to Underperform from Hold at JefferiesPG&E (PCG) downgraded to Sell from Neutral at CitiTerex (TEX) downgraded to Underweight from Equal Weight at Barclays
MONDAY’S EARNINGS ANNOUNCEMENTS Before the open: NoneAfter the close: Puyi (PUYI)
Monday’s economic reports (EST): No major announcements
METALS / OILGold closed at $1488.70 an ounce, down $12.20Silver settled at $17.54 an ounce,