The Bulls are Minding the Store

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Stocks rallied Monday despite the threat of rising short-term interest rates before the end of the year.

The financial sector was one of the best performers with the SPDR KBW Bank (ETF) (NYSEARCA:KBE) up 0.9%. Wells Fargo & Co (NYSE:WFC), up 2.2%, and JPMorgan Chase & Co. (NYSE:JPM), up 1.1%, led the major banks. Regional banks also advanced with the SPDR KBW Regional Banking (ETF) (NYSEARCA:KRE) gaining 0.8%.

For the month of July, personal income rose 0.4%, while personal spending was up 0.3%. The Federal Reserve uses these metrics for guidance on the strength of the economy and as an inflation indicator.

The implied probability of a rate hike in September based on Fed funds futures fell to 21% on Monday from 33% on Friday.

Oil dropped 1.4% to $46.98 a barrel on concerns about rising interest rates and a stronger U.S. dollar.

At Monday’s close, the Dow Jones Industrial Average gained 108 points at 18,503, the S&P 500 added 11 points at 2,180, the Nasdaq was up 13 points at 5,232, and the Russell 2000 advanced 7 points to 1,245.

The NYSE Composite’s primary exchange traded 660 million shares with total volume of 2.6 billion. The Nasdaq crossed 1.4 billion shares. On the Big Board and Nasdaq, advancers outpaced decliners by about 2.7-to-1.

S&P 500 Chart
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Friday’s close below the well-established inflection point at 2,171.25 on the S&P 500 concerned investors over the weekend. But volume was low and breadth did not confirm a breakdown. On Monday, the index closed more than 5 points above the inflection point.

Conclusion

Many investors and floor traders will take this last opportunity to get away prior to next Monday’s Labor Day shutdown. This week and next are traditionally two of the lowest volume weeks of the year, behind only the Christmas holiday season.

Monday morning’s recovery rally was encouraging, because at least someone is minding the store — and that someone is obviously a bull.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.


Article printed from InvestorPlace Media, https://investorplace.com/2016/08/daily-market-outlook-bulls-minding-store/.

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