Stock Market Today: Looking Ahead to the Fourth Quarter

It was a solid session for investors in the stock market today, as equities rebounded on Monday.

We saw the SPDR S&P 500 ETF (NYSEARCA:SPY) rally 0.5%, the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) jump 0.4% and the PowerShares QQQ ETF (NASDAQ:QQQ) climb 1%.

The worries that engulfed investors on Friday were suddenly dissipated, as we turned our sights to the fourth quarter. While it has been a rewarding nine months for investors, returns have been mostly uneventful over the last year.

Quarter in a Nutshell

The Dow Jones Industrial Average is the best performer from the third quarter, up 95 basis points. The S&P 500 was right behind the Dow, climbing about 50 basis points. The Nasdaq and Russell 2000 each declined for the quarter, slipping 1.1% and 3.1%, respectively.

For the past 12 months, it’s a similar tale, with the S&P 500 and Dow Jones up 2.2% and 1.9%, respectively. The Nasdaq is basically flat, down 0.6%, but the Russell has really struggled, falling 10.4%.

The question becomes, will this be like last year, where the markets enter the fourth quarter near their highs, only to get slaughtered by Christmas? While risks still linger, 2019 features a dovish, rate-cutting Federal Reserve, not a hawkish rate-hiking Fed like we had last year.

It won’t take long to see some big moves either, with earnings set to kick off in a few weeks.

Movers in the Stock Market Today

Blackstone (NYSE:BX) slipped more than 3%. The fall came after the company announced it will buy Colony Capital (NYSE:CLNY) for $5.9 billion. It’s an effort to beef up Blackstone’s logistic assets.

The move comes just two weeks after Blackstone bought Dream Global for $6.2 billion CAD.

Another retailer bites the dust, with Forever 21 filing for bankruptcy yesterday. Further, mall traffic is down as consumers shift their shopping habits online, and a low-margin business like Forever 21 didn’t have much cushion to lean on.

It joins the long list of those that have struggled, with Sears finally getting wiped out this year, and J. C. Penney (NYSE:JCP) still hovering under $1 per share. Gap (NYSE:GPS), H&M and others have struggled as well, although aren’t in nearly as dire of straits.

Boeing (NYSE:BA) shares opened near flat on the day but slid slightly lower Monday. The decline comes on more negative reports, however, this time they’re not tied to 737 MAX issues. Boeing notified the Federal Aviation Administration of another issue, which shows structural cracking in the wing support of its 737 NG.

The 737 NG is one of the most popular jets in the world, so a large issue with this plane — like the 737 MAX — could deal a major blow to Boeing.

According to reports, BP (NYSE:BP) CEO Bob Dudley is prepping to step down from the energy conglomerate. Tuesday, Oct. 1 will mark Dudley’s 10th year at the helm, and reports suggest the procedure will take place in the next year. He is BP’s first American CEO and has indicated over the years his desire to step down at the age of 65. Dudley turned 64 earlier this month.

Thor Industries (NYSE:THO) soared more than 15% after the company beat on earnings estimates. Despite missing on revenue expectations, investors bid up the stock on the results. Due to the lofty gains, THO was a feature in the Top Stock Trades column Monday.

Call of the Day

Apple (NASDAQ:AAPL) was also among the list of Top Stock Trades, given its 2.4% rise as it breaks out of a key pattern. Helping fuel the move was JPMorgan analyst Samik Chatterjee, upping his price target to $265. The target implies about 21% upside from Friday’s closing price.

Another big call from JPMorgan analysts? That it’s time to buy European equities. European stocks have fallen more than 20% (in U.S. dollar terms) over the last 18 months, while valuations are compelling, they say.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL. 

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