Friday’s gains were modest for the widely followed domestic equity benchmarks, but on the Dow Jones, a slew of familiar names lifted the blue-chip index to another all-time high today.
- The S&P 500 was flat%
- The Dow advanced 0.08%
- The Nasdaq Composite inched lower by 0.17%
- Under the theme of big brands boosting the Dow today, Nike (NYSE:NKE) was the index’s leader, gaining 0.77%.
Albeit in modest fashion, Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) were also among the Dow winners today after oil advanced to a three-month high. The Energy Information Administration inventories report oil out earlier today showed oil stockpiles decreased by 5.467 million barrels for the week ended Dec. 20, well above the 3 million barrel decline analysts expected.
Keeping with the theme of small gains, in addition to Nike, several of the Dow’s other consumer-related names closed slightly higher following yesterday’s report that e-commerce sales hit record highs this holiday season.
In fact, with 24 of the 30 Dow stocks higher in late trading, the only consumer name in the red was Home Depot (NYSE:HD), but it’s loss was tiny.
Nike on a Roll
A research firm known as Consumer Edge Group initiated coverage of Nike today with an “outperform” rating and $110 price target. That estimate could need some upward revising soon if Nike stock continues its torrid pace, which includes a December gain of more than 8%.
The more likely catalyst for Nike shares today was news that the company signed Dallas Mavericks star Luka Doncic, the 2018-2019 NBA rookie of the year, to a Jordan Brand endorsement deal. Doncic is a likely All-Star this season and a credible MVP candidate, so this deal could have some impact on Nike shares in 2020.
On a day when plenty of the Dow’s more defensive names strutted their stuff, Coca-Cola (NYSE:KO) took part in that party, advancing 0.52%. That stock along with fellow Dow consumer staples name Procter & Gamble (NYSE:PG) were among the index’s top performers today and more could be on the way for those low beta names in 2020 due to some long-running advantages for these household names.
As Barron’s notes, Coca-Cola enjoys low labor costs, an advantage that could be on display next as wages rise. The argument against consumer staples stocks is that after rallying this year although the market largely preferred higher beta sectors, big names like KO and PG are pricey.
Speaking Of Defensive
Verizon (NYSE:VZ) fits the bill as a defensive Dow stock, but it’s up just 9% this year, nowhere near the pace set by the aforementioned KO and PG. Next year may not bring much more to cheer about when it comes to Verizon, meaning the 4% dividend yield could remain the primary source of allure with this name.
“Verizon doesn’t expect 5G to meaningfully contribute to revenue growth until 2021. In the meantime, its business remains immensely profitable but isn’t growing much,” reports Barron’s.
Three of this year’s best-performing S&P 500 stock are semiconductor stocks. That doesn’t include Dow component Intel (NASDAQ:INTC). Given Intel’s heft relative to other chip stocks, it’s rare that it will rank among the top performers on an annual basis, but here we are talking about the stock being up an admirable 28% year-to-date and hitting a 52-week high today. That’s pretty good work for an old school tech name.
Bottom Line on Today’s Dow Jones Action
This is the fifth consecutive week of weekly gains for the S&P 500 so it’s fair to say domestics are entering 2020 on a strong note. Other assets getting in on the act, too. As noted earlier, oil advanced to its highest levels in three months, potentially providing some reason to examine energy stocks in the first quarter, while gold notched its best weekly performance since August.
If the S&P 500 can cobble together a couple of decent days to start next week, 2019 will go down as the best percentage performance on an annual basis for the benchmark U.S. equity gauge since 1997.
As of this writing, Todd Shriber did not own any of the aforementioned securities