Market Perspective for February 3, 2020

Equities rallied on Monday following strong global manufacturing PMIs. Manufacturing improved in the U.S., China and the Eurozone. The ISM manufacturing index hit 50.9, well ahead of the 48.5 consensus forecast.

The Nasdaq was the best performing index. It gained 1.24 percent.

Materials was the best performing sector on Monday. SPDR Materials (XLB) climbed 2.10 percent. The largest company in the sector, Linde (LIN), gained 3.11 percent. Another top-10 holding, Sherwin-Williams (SHW), rose 3.22 percent.

SPDR Technology (XLK) rallied 1.32 percent on the day as tech continues to perform strongly. SPDR Communication Services (XLC) increased 1.19 percent. Alphabet (GOOGL) reported earnings after the bell on Monday. It missed on revenues, sending shares lower by about 4 percent, but it beat earnings estimates by 23 percent. It broke out its revenue from YouTube for the first time, admitting it generated $15.2 billion in sales in 2019.

The January employment report will be released this week. Economists forecast 165,000 new jobs, up from 145,000 in December. They see unemployment holding steady at 3.5 percent and wage growth rising 0.3 percent.

The ISM services index will be out mid-week. Analysts expect it will hold steady at 55.0 percent. Motor vehicle sales for January will be announced as well.

Crude oil fell below $50 per barrel in late trading. It was the first time in a year that crude oil traded below that level. SPDR Energy (XLE) slid 1.31 percent on Monday.

The U.S. Dollar Index gained 0.50 percent. The dollar gained against the three largest currencies in the index, the euro, yen and pound.

Disney (DIS) will report earnings on Tuesday, along with Gilead Sciences (GILD), Centene (CNC), Ford (F), Snap Inc. (SNAP), ConocoPhillips (Cop), BP plc (BP) and Fiserv (FISV).

Wednesday brings Qualcomm (QCOM), Merck (MRK), General Motors (GM), Boston Scientific (BSX), O’Reilly Automotive (ORLY), Humana (HUM), MetLife (MET) and Twilio (TWLO).

Bristol-Myers Squibb (BMY) will announce on Thursday. Uber (UBER), Activision Blizzard (ATVI), Becton Dickinson (BDX), Philip Morris International (PM), Twitter (TWTR) and Cardinal Health (CA) also report.

The week closes out with AbbVie (ABBV), Canada Goose (GOOS), CBOE Holdings (CBOE), Hanesbrands (HBI) and Honda Motor (HMC).

 

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