US Stock Market Overview – Stocks Rally Close near Record; Intel Drives Semi’s Higher

US stocks rallied on Friday, despite mixed earnings in 2-different bellwether stocks. The S&P 500 index close just 3-points off a record all-time high. Most sectors were higher led by materials and energy shares.  Utilities and Real estate bucked the trend. As riskier assets gained traction, yields moved higher putting downward pressure on interest rate sensitive stocks. The rally in US yields also buoy the US dollar. The federal deficit rose to 7-year high, as spending continued to exceed revenues.

Intel Hits A Home Run, Amazon Misses

Intel buoyed the entire semi-conductor space, as the stock surged nearly 8% pulling the entire sector higher. The company reported earnings of $1.42 per share versus expectations that it would produce profits of $1.24 per share. Revenue came in at $19.19 billion versus expectation that it would generate $18.05 billion.

These solid earnings were offset by disappointing earnings from Amazon. The company reported Q3 earnings That initially sent the stock down 9% in afterhours trading. Profits were $2.1 billion, or $4.23 a share, on sales of $69.98 billion. Revenues rose from $56.58 billion a year ago, but earnings declined from $5.75 a share, the first time Amazon earnings have shrunk on a year over year basis since June 2017. Analysts expected Amazon to report earnings of $4.59 a share on sales of $68.83 billion.

Federal deficit Rise to 7-year high Climbing 26% to $984 billion

The US Treasury Department reported on Friday that the federal budget deficit for 2019 rose 26% year over year to $984 billion. The deficit marks the widest the difference between revenue and spending has expanding in the past 7-years. Corporate taxes total $230 billion which was up 12% while individual taxes rose 2% to $1.7 trillion. Receipts totaled $3.4 trillion, up 4% through September.

US-Chinese Trade Negotiations Could Go Adrift

It now appears that the negotiation between China and the US could be derailed. China is offering to purchase 20 billion a year of US agricultural products which is the amount purchase in 2017 if the US will return tariffs back to the 2017 levels. This might make the phase 1 portion of the deal more difficult than previously expected. President Trump was on the tape on Friday claiming that a deal was in reach.