Market Perspective for March 11, 2019

Shares of Boeing (BA) initially pulled the Dow Jones Industrial Average lower this morning, but a broad-based rally enabled the index to have a positive return of 0.79 percent.  The Nasdaq gained 2.02 percent, its largest one-day gain since January. SPDR Technology (XLK) advanced 2.15 percent. VanEck Semiconductor (SMH) and iShares Expanded Tech Software (IGV) rose 2.13 percent and 1.89 percent, respectively.

Boeing (BA) weighed on the defense and aerospace sector. The stock fell 12.5 percent at the open before rallying back to a loss of 5.3 percent. The drop came after an Ethiopian Airlines owned 737 MAX 8 jet crashed minutes after takeoff this weekend. It was the second time this jet crashed after takeoff in six months, raising the question of a design flaw. iShares U.S. Defense & Aerospace (ITA) slid 0.30 percent.

From a technical perspective, Boeing gapped up on January 30 after reporting stronger than expected earnings. Traders look for gaps to close as the old price levels are tested. Today’s intraday low “closed the gap” and could mark an important bottom for the stock, assuming there’s no further fallout from the recent tragedies.

Retail sales rose 0.2 percent and sales ex-autos climbed 0.9 percent, both beating expectations.

On Tuesday, the National Federation of Independent Business will release its February small-business confidence index. It was 101.2 in January. The Bureau of Labor Statistics will deliver February consumer price inflation. Economists forecast a 0.2 percent increase in both headline and core inflation.

Producer prices will be released on Wednesday, with economists predicting a 0.2 percent increase. Thursday brings new home sales for January, expected to be roughly in line with December’s annualized pace of 621,000. On Friday, February industrial production and the University of Michigan’s advance consumer sentiment for March are set for release.

Several major technology companies will report earnings this week on Thursday.  The firms include Oracle (ORCL), Broadcom (AVGO) and Adobe Systems (ADBE). Among the other companies reporting this week are Dick’s Sporting Goods (DKS), Viking Therapeutics (VKTX) and Dollar General (DG).

 

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