Stocks blitzed higher on Monday, setting aside concerns about President Trump’s aggressive trade protectionism efforts. The catalyst seems to have been headlines that GOP House Speaker Paul Ryan urged Trump to not advance his trade tariff plan and that Congress could take action to thwart what looks like the opening salvo of a global trade war.
Trump didn’t back down, however, noting that he wasn’t going to stop when asked about Ryan’s comments. Also playing a role is the ongoing momentum in the “FANG” stocks including Facebook Inc (NASDAQ:FB) and Amazon.com, Inc. (NASDAQ:AMZN), which are up 7% off of Friday’s lows as a group.
In the end, the Dow Jones Industrial Average gained 1.4%, the S&P 500 gained 1.1%, the Nasdaq Composite gained 1% and the Russell 2000 gained 0.8%. Treasury bonds were mixed, the dollar was mixed, gold lost a touch, and crude oil moved higher. Breadth was heavily positive, with advancers outpacing decliners by a 2.8-to-1 ratio.
Defensive utility stocks led the way higher with a 2% gain with financials not far behind, up 1.4%. Stocks in Asia were weak overnight, with Hong Kong’s Hang Seng down 2.3%.
Conclusion
All you need to know: AMZN is back above $1,500 and is within a hair of record highs. Yet the NYSE Composite Index, with a broader weighing of components, is 7% off of its highs and only 5% above its February panic lows.
Looking ahead, all eyes will be on Friday’s payroll report. Remember that a month ago, the January report unleashed a wave of selling after wage inflation surprised to the upside. Economists are looking for the unemployment rate to decline to 4% with the annual increase to average hourly earnings potentially increasing to the 3% threshold (from 2.9% last month).
Check out Serge Berger’s Trade of the Day for March 6.
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.
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Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
