So much of the stock market’s day-to-day price action is dictated by politics. Be it impeachment talks like we have right now or trade war worries like we’ve had for ages, these headwinds continue to weigh on equities.
That was the story early in the stock market today, as investors continue to look at Washington as a driver of stock prices.
The SPDR S&P 500 ETF (NYSEARCA:SPY) fell 0.2%, the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) dropped 0.3% and the PowerShares QQQ ETF (NASDAQ:QQQ) sank 0.4%.
D.C. Drives the Market
Both bulls and bears, and Democrats and Republics, are misled by stocks. Many chirp about the S&P 500’s 18.5% year-to-date rally or the fact that we’ve seen the YTD returns be negative only one day this year. Those observers conveniently leave out the fact that it took less than one quarter of trading to see a bear market engulf equities, as we ended 2018 near the lows.
There’s a lot of different ways to look at the stock market. Despite the negativity Democrats cast upon President Donald Trump or how amazing Republicans think he’s has done, we’re really not going anywhere. At least in the stock market.
The S&P 500 is up just 2.2% over the past 12 months. That’s the best of the major U.S. indices, with the Nasdaq flat, the Dow Jones Industrial Average up just 1.5% and the Russell 2000 down 10.2% in the same time frame.
Going back 20 months ago, the S&P 500 is up just 375 basis points.
The point is: Stocks have been making a whole lot of noise without doing a whole lot of anything — except pin-balling back and forth waiting to see who will be in office and whether the trade war is getting better or worse on any given day.
It’s not necessarily a good thing or a bad thing, it just is what it is. Although, it would be nice to get back to trading on earnings and fundamentals instead of worrying about an overnight tweet sending the markets into chaos the next day.
But before you get too negative or feel way too bullish, just remember we’ve been stagnating for an awfully long time.
Movers in the Stock Market Today
Peloton (NASDAQ:PTON) went through with its IPO on Thursday. Shares priced at $29, at the high end of its $26-$29 range. However, the stock opened for trading at $27 and closed lower at $25.76, down 11.2% for the day. That’s disappointing action from a somewhat high-profile IPO. But given the debuts of Lyft (NASDAQ:LYFT), Uber (NYSE:UBER) and the disaster that is WeWork, it’s no surprise to see softness in the Peloton IPO.
Facebook (NASDAQ:FB) just can’t avoid the regulatory spotlight. The U.S. Department of Justice is opening its own antitrust investigation into the social media giant. Remember, that’s separate from the antitrust investigation from the Federal Trade Commission, as well as the investigation from a group of attorney generals. Sheesh…
Shares fell 1.5%, although rallied well off the lows on the day.
General Motors (NYSE:GM) stock rallied 1.4% on the hopes that its spat with the UAW will end soon. According to reports, the two parties are nearing a new agreement that will hopefully send employees back to work. It’s estimated that the each day the strike continues, General Motors loses 3 cents per share, although it’s believed the company can effectively manage inventory and alter prices to offset some of those losses.
Interactive Brokers (IEX:IBKR) fell 0.4% on the day after reports surfaced that the company would offer a commission-free alternative, call IBKR Lite. However, the stock is doing much better than some of its peers, with E*Trade Financial (NASDAQ:ETFC) and TD Ameritrade (NASDAQ:AMTD) down 4.8% and 6.5%, respectively.
The move also comes as a number of commission-free brokerage alternatives have sprung up, like Robinhood and Public, for example.
Conagra Brands (NYSE:CAG) stock jumped 3.7% on the day, hitting new 2019 highs in the process. The company beat on earnings estimates and missed on revenue expectations, although the latter grew more than 30% year-over-year thanks to its mergers and acquisition strategy. Luckily, management’s full-year outlook for earnings and sales was ahead of estimates, thus, giving shares an extra boost on the day.
Shares of PG&E (NYSE:PCG) were only down slightly on Thursday, although near $10, the stock hovers near the low end of its 52-week range between $5.07 and $49.42. The company is making headlines on the day as it preps for a $29.2 billion reorganization, following deadly wildfires in California.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
