U.S. equities drifted higher in drama-free trading on Monday, a blissful calm after last week’s volatility. Political headlines slowed as President Trump continues his first foreign trip moving from Saudi Arabia to Israel today.
Several appearances by Federal Reserve officials broke no news ahead of the release of the latest meeting minutes later this week. And traders looked ahead to the possible extension of OPEC’s supply freeze agreement at an upcoming policy meeting.
In the end, the Dow Jones Industrial Average gained 0.4%, the S&P 500 gained 0.5%, the Nasdaq Composite gained 0.8% and the Russell 2000 added 0.7%. Treasury bonds were unchanged, the dollar was down against the euro, gold added 0.6% as silver surged and oil gained 0.9% to hit a one-month high.
The gain in silver boosted the ProShares Ultra Silver ETF (NYSEARCA:AGQ) to a 3.6% gain for the day for Edge subscribers.
Breadth was positive, with 2.2 advancers for every declining issue on light volume, with just 792 million shares on the NYSE totaling 88% of the 30-day average. Technology stocks led the way with a 1% gain while energy was the laggard, down 0.2% despite the gain in crude.
Ford Motor Company (NYSE:F) gained 2.1% on the announcement CEO Mark Fields would retire amid frustration with the company’s stalled stock price and a loss of momentum in areas like electric vehicles and autonomous technology. Qualcomm, Inc. (NASDAQ:QCOM) gained 2.8% on an upgrade from JPMorgan on the closure of the NXPI acquisition. And Oclaro, Inc. (NASDAQ:OCLR) gained 10.2% on a positive Jefferies note following China Mobile’s selection of ZTE (representing about 10% of the company’s business) for buildout of its packet network.
On the downside, Advanced Micro Devices, Inc. (NASDAQ:AMD) fell 3.3% — reversing a recent rebound rally — after Citigroup cast doubt on recent reports the company could get a licensing agreement from Intel Corporation (NASDAQ:INTC) for certain graphics processor technologies. Amgen, Inc. (NASDAQ:AMGN) fell 2.2% on cardiovascular risks for its Evenity treatment for osteoporosis.
Turning back to OPEC, the oil sheiks will meet in Vienna on May 25. The consensus is for a nine-month extension to the supply cap that’s been in place in the first half of the year aimed at normalizing the global oversupply situation.
There has also been chatter of a potentially deeper level of output cuts. The risk, of course, is that OPEC is merely sacrificing hard won market share gains earned during the post-2014 price war against U.S. shale producers; as wildcatters have eagerly increased U.S. drilling rig counts in response to the OPEC-driven energy price recovery that started in early 2016.
Outside of OPEC, watch for the release of the latest Fed meeting minutes on Wednesday for insight into the timing and pacing of additional interest rate hikes through the end of the year. Wall Street is braced for another hike in June; but the rest of the year is murky with less than a 50% chance of a second hike before 2018.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.