Dow Jones Today: Discouraging Data

Stocks posted modest losses Thursday as some disappointing domestic data points were delivered. The Bloomberg Consumer Comfort Index fell to 61.7 for the week ended Sept. 22, down from a reading of 62.7 in the previous week.

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“The buying gauge eased to 54.3 from 54.5 with views on personal finances and the national economy also posting declines,” according to Bloomberg.

Those numbers come ahead of the Conference Board’s Consumer Confidence reading for September, which is due out tomorrow. On the jobs front, jobless claims rose to 213,000 last week, according to the Labor Department, slightly ahead of economists’ expectations of 212,000 claims. Conversely, the four-week average fell to 212,000, which is somewhat encouraging because that’s the more widely observed reading as it’s smoother than the weekly number.

There was also some good trade news out today and, yes, this time it involves China. China’s Ministry of Commerce spokesperson Gao Feng said today his country has purchased a “considerable” level of pork and soybeans from the U.S. in recent weeks ahead of scheduled trade talks between the world’s two largest economies next month.

Feng added that the two sides remain in “close communication” ahead of the trade negotiations. Increased agriculture purchases have been frequently mentioned by President Donald Trump as key to reaching a trade accord with China.

With that in mind, it was somewhat surprising that the Nasdaq Composite lost 0.58% while the S&P 500 slipped 0.24%. The Dow Jones Industrial Average closed lower by 0.30%. In late trading, it was a split decision for the Dow as 15 of its components were trading while 15 were spotted lower.

A Familiar Victim on the Dow Jones Today

The worst-performing name in the Dow today was UnitedHealth (NYSE:UNH), extending a tale of woe for the managed care provider this year. To be fair, UnitedHealth was far from the only stock in its troubled industry being punished today. As I’ve been noting over the course of 2019, the managed care sector, in which UnitedHealth is the largest component, has been under siege due to the sheer number of contenders for the 2020 Democratic presidential nomination that favor Medicare For All.

Problems are emerging on that front because the recent Ukraine controversy is seen as weakening former Vice President Joe Biden’s candidacy. Biden is the one Democratic contender with a credible shot at the nomination that doesn’t favor Medicare For All.

For stocks like UnitedHealth, the bad news is Sen. Elizabeth Warren (D-MA), who does favor Medicare For All, is gaining plenty of momentum against Biden. I’m not talking politics. I’m talking price action. With the S&P 500 Managed Health Care Index, of which UnitedHealth is a member, residing at its lowest levels since April, markets are confirming Medicare For All is a bitter pill to digest.

Another Familiar Face

Boeing (NYSE:BA) was back in the news today as the U.S. National Transportation Safety Board (NTSB) pointed out that the crews on Lion Air and Ethiopian Airlines crashes, both of which involved the 737 MAX jet, did not respond to the plane’s emergency warnings as Boeing and regulators expected they would.

“In both incidents, investigators have focused on the role played by a software system called MCAS (Manoeuvring Characteristics Augmentation System), which was designed to make the aircraft easier to fly,” reports the BBC.

The NTSB is not blaming the crews here. Rather, the agency is saying Boeing needs to pay more attention to how crews may react in the face of in-flight emergencies.

Dow Down

No, not the index. The chemicals maker Dow Inc. (NYSE:DOW), which has been on a tear this month, traded lower today. Investors fortunate enough to have caught the stock’s rally this month may want to consider taking some profits.

Following second-quarter earnings commentary from specialty chemicals makers, “two-thirds of companies providing updated sales guidance lowered annual outlooks, largely due to moderating demand amid a challenging macro backdrop and trade conflict uncertainty,” according to Corbin Advisors.

The firm also noted “63% of executives point to sluggish demand in Europe; ~50% cite Asia / China.”

Bottom Line on Dow Jones Today

Today was largely a listless day and barring any unexpected surprises on the China trade front and until earnings season starts in earnest, more sluggish trading days could await over the near-term as the impeachment gambit controls the national political and equity markets narrative.

I’m not commenting on the efficacy of the impeachment effort, but what is clear is that adds a layer of uncertainty and markets do not like uncertainty.

Todd Shriber does not own any of the aforementioned securities.

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