China Trade Talks Loom While Indexes End Higher On Wall Street

The stock market closed higher Friday, knowing full well that a pivotal meeting on China trade agreements will take place on Saturday, and it could result in sharp market moves on Monday.




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A late jump sent the major stock indexes to the day’s best levels. The Nasdaq composite rose 0.5% and got much of that gain in the final 15 minutes of the session. The S&P 500 added 0.6%, while the Dow Jones Industrial Average rose 0.3%.

The Nasdaq 100 — where the largest nonfinancial companies of the Nasdaq are found — lagged. Invesco QQQ Trust (QQQ), which tracks that index, limped to a 0.2% gain. Most of the largest Nasdaq components were weak or lower, including Microsoft (MSFT), Apple (AAPL), Alphabet (GOOGL), Amazon.com (AMZN) and Cisco Systems (CSCO). The latter slid nearly 2%.

Small caps again were the standouts, as the Russell 2000 rallied nearly 1.3% and climbed back above the 50-day moving average. Among small caps, cyclicals such as industrial, material and consumer discretionary were strongest.

The Russell 2000 climbed 1% for the week, easily beating the major indexes. The Nasdaq, Dow and S&P 500 fell modestly.

Volume rose, according to early data, as index funds bought and sold shares to keep their portfolios aligned with the new Russell index components. The once-a-year event is known as the Russell rebalancing.

Breadth was stronger than the index gains would suggest. Winners led losers on the NYSE by a 5-to-2 ratio and by nearly 3-to-1 on the Nasdaq.

China Trade Talks Are The Big News Item

President Donald Trump was set to meet with Chinese President Xi Jinping at the G-20 summit in Japan Saturday. While a final trade deal is not expected, the market is watching for any movement indicating where the talks are headed.

Leading growth stocks outperformed. The Innovator IBD 50 ETF (FFTY) climbed 0.8%.

Financials led after a number of banks passed their annual stress tests and announced dividend increases and share buyback plans.

JPMorgan Chase (JPM), the nation’s largest bank, gapped above its 50-day moving average. It is still working on a base. JPMorgan said it plans to raise its quarterly dividend to 90 cents a share from 80 cents and set a stock buyback plan of up to $29.4 billion.

Installed Building Products (IBP) broke out of a flat base, clearing a 55.69 buy point. The relative strength line made a new high, but volume was mediocre.

Evertec (EVTC) gapped above the 31.73 buy point of a cup-without-handle base in above-average volume. Susquehanna initiated coverage with a “positive” rating and a 36 price target, Dow Jones reported.

Juan Carlos Arancibia is the markets editor of IBD and oversees our market coverage. Follow him [email protected]_jarancibia

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Originally posted 2019-06-29 02:01:35.

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